OUTA goes to court to ring-fence Gupta mine funds | Fin24
 
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OUTA goes to court to ring-fence Gupta mine funds

Sep 21 2017 15:00
Jan Cronje

Cape Town - Anti-corruption advocacy group the Organisation Undoing Tax Abuse (OUTA) is set to lodge an urgent interdict with the North Gauteng High Court on Thursday afternoon to freeze some R1.75bn in mine rehabilitation funds from the Gupta-owned Optimum and Koornfontein coal mines. 

Koornfontein Mine and Optimum Coal Mine were two of 20 companies that took legal action against the Bank of Baroda - where the rehabilitation funds are kept - to try and stop the termination of the family's banking services.

But earlier on Thursday the North Gauteng High Court dismissed the Guptas’ urgent court bid to prevent the bank from closing the family’s accounts.

The Guptas have to remove their money from the bank by the end of the month, and it is uncertain what will happen to the mine rehabilitation funds, or where they will be transferred. 

Absa, Nedbank, Standard Bank and First National Bank have all closed the Gupta-linked bank  accounts. So have the Bank of China, the Bank of India and the State Bank of India. 

Ring-fence the money 

“We want to ensure that this money doesn’t leave the country or find its way into the Gupta family’s pockets,” said Ben Theron, OUTA’s chief operating officer, in a statement before the interdict was heard. 

OUTA said that under the Mineral and Petroleum Resources Development Act and the National Environmental Management Act, funds in mine rehabilitation trusts “cannot be used for purposes other than managing the environmental damage caused by mining activities”.

The advocacy group's water and environment spokesperson Julius Kleynhans told Fin24 that OUTA wanted the money to be "ring-fenced". 

“When anyone establishes a mine, or puts into process an application to explore, they need to establish a rehabilitation fund for when the mine closes. That fund needs to sustain the rehabilitation when the mine closes," he said 

“In that same breath, mines are not allowed to touch that funding for daily operational expenses. Unfortunate with all the controversy surrounding the Guptas, one cannot help but to be excessively vigilant on that money being lost.”    

Show me the money 

The Guptas have previously had to transfer mine rehabilitation funds after their accounts were shut.  

When Standard Bank closed its Gupta-related accounts in June 2016, the Department of Mineral Resources said that Optimum had to ensure that its mine rehabilitation fund was transferred “to a financial institution registered with the South African Reserve Bank”.

“The Department also emphasised that the funds should remain in the trust, as rehabilitation funds cannot be used for any other purpose,” the department said in October 2016. 

One possibility the department raised at the time was that the mine rehabilitation funds could be deposited into an account administered by the department itself.

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