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Gupta-linked Bank of Baroda holds 'proceeds of crime' - NPA lawyer

Mar 02 2018 13:08
Renee Bonorchis, Bloomberg

Johannesburg - The Bank of Baroda’s SA has been in possession of the "proceeds of crime" linked to a dairy farm project that involved the politically connected Gupta family, said Thato Ntimutse, a lawyer for the National Prosecuting Authority’s Asset Forfeiture Unit.

While India’s Bank of Baroda has tried to stop the state from freezing R30m of its funds over the dairy farm dispute, it should be noted that the lender has gone so far as to take its own clients, the Guptas, to court to try and sever ties, Ntimutse said in the high court in Bloemfontein in the Free State province on Friday.

Although state funds intended for the farm may also have gone through other banks in South Africa, Bank of Baroda has a single current account into which all funds are paid so that legal and illegal money co-mingles, he said.

The case is related to a state-owned farm in the Free State leased to Gupta-linked company Estina in 2012. The regional government agreed to help develop the land, but the high court on January 19 gave the National Prosecuting Authority permission to freeze the project’s assets after more than R220m destined for the farm was said to have been transferred to Atul Gupta, one of three brothers, and a number of companies and associates. State prosecutors allege Atul Gupta received R10m.

The R30m preservation order is wrong because the money due to clients had already been withdrawn and the attachment of an equal amount of the lender’s own funds is “unsustainable,” Luke Spiller, a legal representative for the Bank of Baroda, said in the court on Thursday.

No show

Atul Gupta, who didn’t appear in Bloemfontein on Thursday or Friday, has previously denied in court documents that cash meant for the development of the dairy farm was transferred to his private bank accounts. 

Bank of Baroda transferred the R10m that Estina paid it into a fixed-deposit account in the farm’s name a few days after first receiving the funds and they did not go to Atul Gupta, according to his lawyer Rafik Bhana, who also spoke in Bloemfontein.

“The test is not whether this is money laundering or not, it’s about the R10m,” Bhana said. “This is more than about the Guptas. This is about the rule of law.”

Atul Gupta, who signed his legal documents in Dubai, and businesses linked to his family have applied to the Bloemfontein court to reconsider the assets’ attachment.

The Gupta family have close ties to former president Jacob Zuma and have been accused of using the association to win state business and influence government appointments. Zuma and the Guptas have denied wrongdoing.

The crackdown on the dairy farm project came just weeks after President Cyril Ramaphosa replaced Zuma as head of the ruling African National Congress.

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