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Johannesburg - Two separate court orders which were granted to preserve nearly R1.7bn in the Gupta-linked Optimum and Koornfontein mines' rehabilitation trusts, have created confusion about which order the Bank of Baroda should follow.
The first preservation order was granted to the Organisation Undoing Tax Abuse (OUTA) last year. They asked that the Bank of Baroda (BOB) retain the money and that the trustees in the trusts be replaced.
Last week the Asset Forfeiture Unit (AFU) was also granted a preservation order of the money in the two trusts. Their order asked that the BOB transfer the money to an interest-accruing Nedbank account and that the BOB furnish the Director General of the Department of Mineral Resources, within 30 days, the full transactional history of the trust accounts, as well as any other documentation related to them.
The AFU preservation order comes amidst the BOB pulling out of the country. The bank won a court case on Monday against 19 Gupta-linked companies who tried to prevent the bank from closing its South African operations.
READ: Gupta case against Bank of Baroda dismissed with costs
In a letter to the NPA, the trustees of both trusts, the Minister of Mineral Resources, Nedbank and OUTA, BOB’s legal representative, Tabacks Attorneys, said that since September 26 last year they maintained the accounts strictly in accordance with the terms of the OUTA order.
But now they were faced with two mutually exclusive orders the letter said.
“In terms of the OUTA order, our client is directed to continue to hold the trust funds in accounts maintained by it, for the credit of the trusts,” the letter said. “In terms of the NDPP (national director of public prosecutions) order, our client is directed immediately to transfer the funds to Nedbank.”
READ: Optimum denies claims of 'Gupta stench'
The attorneys said that if they comply with the OUTA order they are in breach of the NDPP order and vice versa.
“It is obvious that our client is unable to comply with both.”
The letter went on to say that as a non-clearing bank they were only able to provide banking services because of a sponsorship arrangement with Nedbank. But Nedbank has given notice of termination of all arrangements of any kind with the BOB from April 30 2018. Nedbank had directed the BOB to provide banking details of another institution to which Nedbank will transfer all credit balances.
“It appears the NDPP had intended, but then failed, to have a Curator Bonis appointed… We assume that Nedbank has agreed, in advance and without having completed any of the required AML (anti-money laundering) and/or KYC (know your customer) procedures, to accept as its client whomsoever may eventually be declared to be entitled or authorised to bind the trusts,” the letter said.
READ: Gupta-linked companies feeling the pinch
The bank asked the differing parties to reach a consensus on which order they should comply with. Taback said that if they have not been given satisfactory instructions by the close of business on Thursday the Bank of Baroda will approach the High Court for direction.
The AFU application contained an affidavit by the head of the Asset Forfeiture Unit, Motlalekhotso Knorx Molelle, which said the preservation order related to R1.4bn of the Optimum Mine Rehabilitation Tust Fund and R280m in the Koornfontein Mine Rehabilitation Trust Fund.
He said the primary purpose of rehabilitation funds is to make financial provisioning for the environmental rehabilitation of a mining area upon the decommissioning of mining activities.
Molelle said in his affidavit that the BOB intended transferring all unclaimed funds to a trust account held in the name of Tabacks Attorneys.
Molelle said that Nedbank “in their capacity as transaction bank or platform for Baroda transactions, has agreed that it will handle all administration regarding the property should same be preserved in terms of POCA (Proceeds of Crime Act)”.
He said that it was therefore unnecessary for the court to appoint a curator bonis, but he reserved the right to approach the court on an urgent ex part basis with the application for the appointment of a curator bonis should the need arise.
The final court order stated that Nedbank take control of the money and preserve it in an interest bearing account until being issued through a court order to release the money.
OUTA CEO Ben Theron said OUTA was consulting their attorneys and they were deciding whether they needed to approach the court to make a declaratory order, but their main concern was to keep the money away from the Guptas and they were happy to work with the AFU.
NPA spokesman Luvuyo Mfaku said there was no confusion because the order OUTA had received was an interim order, while the NPA’s order was a permanent order that was already in effect.
“The money will be sent to Nedbank, they have been served with the order and they will hold the money,” said Mfaku.
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