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Guptas said to have found alternative after Bank of Baroda snub

Aug 15 2017 18:28
Anto Antony and Renee Bonorchis, Bloomberg News

Johannesburg - The Gupta family, whose accounts are being closed down by the Bank of Baroda’s South African unit, have told the Indian lender that they’ve found another company willing to offer them banking services, according to a person familiar with the matter.

The Bank of Baroda, which took on the Guptas after South Africa’s four biggest lenders closed their accounts, have given the family’s businesses two extra months to transfer their accounts to the new bank, the person said, declining to name the institution and asking not to be identified because the details are confidential.

The family’s businesses have paid back most of their loans from Bank of Baroda, the person said.

Gary Naidoo, a spokesperson for the Guptas, didn’t respond to a message on his mobile phone or an email. TNA Media, owned by the family, didn’t immediately respond to emailed questions seeking comment.

The Gupta family, friends of President Jacob Zuma and in business with one of his sons, lost their banking relationships after the lenders, including Barclays Africa Group and Standard Bank Group, said they risked falling foul of regulators and the law by continuing to offer services to the family and their companies.

The Guptas were last year named in a probe by SA’s former Public Protector into government-linked bribery and corruption. The Public Protector said her findings weren’t conclusive and instructed Zuma to set up a judicial inquiry. Zuma and the Guptas have denied any wrongdoing.

The Bank of Baroda has significantly wound down activities related to the family, PS Jayakumar, CEO of the Indian-based lender, told reporters in Mumbai on Friday. Bank of Baroda has explained to South African regulators that “banking transactions were bona fide", he said.

The Guptas’ Johannesburg-based newspaper The New Age, and their television station ANN7 told staff on July 25 that Bank of Baroda was closing their accounts and asked the employees to petition the lender, Johannesburg’s Star newspaper reported last month, citing unidentified employees.

The bank gave the Guptas one month to move their money to another lender before all accounts were terminated, the Star said.

Loans repaid

The family’s Oakbay Resources and Energy, which in July stopped trading its securities on the JSE after failing to find accredited sponsors and transfer secretaries, repaid R194m ($15m) of loans to Bank of Baroda by the end of February, the Johannesburg-based company said in an earnings report on June 2.

SA has 16 registered banks and 15 registered local branches of foreign banks, according to the annual report of the SA Reserve Bank’s supervision unit. Apart from local lenders, there are registered banks from countries including Pakistan, India, Taiwan, China, Bahrain, France, Germany, the UK and the US.

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