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Gordhan Lashes Oakbay, Guptas: You Are Plotting Against Treasury

An agitated and strident minister of finance dismisses Oakbay's claims of plots and conspiracy theories.

30/01/2017 12:49 SAST | Updated 31/01/2017 11:22 SAST
Ruben Sprich / Reuters
Pravin Gordhan, Minister of Finance of South Africa attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 19, 2017.

It's not a good idea to call Pravin Gordhan "weak-kneed".

The minister of finance eviscerated the answering affidavits filed by the Gupta family's Oakbay Investments on Monday, turning the tables on allegations that his application in the high court in Pretoria for a declaratory order is part of a politically motivated plot.

In truth, what stands revealed as the real plot is the systematic and highly organised campaign by the Gupta family and its associates against the National Treasury, myself and other targets.Pravin Gordhan

In a 58-page affidavit a strident and irritated Gordhan says the only plot that has been revealed is the Guptas': "(Oakbay) used many months to construct far-ranging accusations against me. In truth, what stands revealed as the real plot is the systematic and highly organised campaign by the Gupta family and its associates against the National Treasury, myself and other targets."

Gordhan twice refers to the "crescendo of controversy" surrounding the Gupta family, Oakbay and its associates while constructing a legal argument why his application to the courts is necessary and why the court should accede to his request for a declaratory order.

He argues that Oakbay, in its papers, has already conceded that his application is valid and that the company should in effect withdraw its opposition and adds that many of Oakbay's allegations are nothing more than "conspiracy theories".

The company is also prone to make "scurrilous" accusations but often refrains from substantiating them.

And nobody — the Guptas, Oakbay or any other company — will tell Treasury what to do: "No business, whether it dabbles in politics or not, holds sway over National Treasury, its officials or its political head — myself."

He also rejects any allegation by Oakbay that his application is part of an elaborate plot to "clip their wings", saying the question of whether the minister has the power to intervene with banks on behalf of an organisation like Oakbay "is a pure question of law" and not a question of "politics or policy".

The minister seems to have been left incredulous by Oakbay's affidavit that concedes he has no authority to intervene in banker-client relationships — something which Oakbay desperately sought, according to Gordhan.

Gordhan's reply follows the lodging of Guptas' court papers on January 20, in which they described Gordhan as "weak-kneed" and unable to take politically sensitive decisions. The minister approached the High Court in Pretoria last year to make an order which confirms Treasury's position that it may not intervene in matters between banks and its clients. South Africa's commercial banks severed ties with the Guptas' Oakbay because of a series of questionable financial transactions.

In his affidavit, Gordhan:

  • Denies allegations that he told a gathering of business leaders that the Guptas' "wings must be clipped";
  • Says the series of suspicious transactions that forms part of his founding papers are set out in a certificate by the Financial Intelligence Centre (FIC) and unless it is challenged by Oakbay will stand;
  • Repeatedly refers to the Public Protector's "State of Capture" report and the findings made with reference to the Guptas; and
  • Argues his locus standi as minister of finance is to ensure the management of risk to the fiscus, the economy and the business environment — all of which were threatened by Oakbay and the Gupta's campaign.

The minister seems to have been left incredulous by Oakbay's affidavit that concedes he has no authority to intervene in banker-client relationships — something which Oakbay desperately sought, according to Gordhan, and the reason why he approached the high court for a declaratory order. He reiterates that Nazeem Howa, Oakbay's erstwhile chief executive, was unambiguous and that the message to him was clear: the minister must intervene on Oakbay's behalf.

The company did not seek to protect itself by approaching the court, as I have invited it to do. Now that I have done so Oakbay alleges that my application is a political plot.Gordhan

"I have indeed engaged to the limited extent that I could with Oakbay's chief executive, and sought to provide him with all assistance and advice in regards to the regulatory framework in which Oakbay, the banks and I must operate. Nonetheless Oakbay continued to approach me complaining about the banks' closure of its accounts," Gordhan says.

"Oakbay's persistent contentions are harmful to the banking sector and thereby to the economy of this country of which it forms a vital part. This has independently been raised with me by the governor of the South African Reserve Bank (SARB)."

He lashes Oakbay for not resorting to the courts when it felt slighted by the banks: "The company did not seek to protect itself by approaching the court, as I have invited it to do. Now that I have done so Oakbay alleges that my application is a political plot. Yet it is Oakbay, the public protector has found, that influences political appointments."

A hearing before a full bench of the Pretoria High Court is due to take place from 28 to 31 March in Pretoria.

Oakbay's contention that the certificate detailing 72 suspicious transactions is flawed and inadmissible does not fly, Gordhan says, and explains the standing of the document and exactly what it does and does not entail: "The certificate stands, it speaks for itself and it clearly does demonstrate a continuing crescendo of controversial transactions, even after the closure of the accounts."

In 2012 there was one suspicious transaction, in 2013 there were five, in 2014 there were six, in 2015 there were two and in 2016 there were 58 to a total value of R6,8-billion: "This demonstrates the significant increase in the number and value of transactions in respect of a single group of companies."

A meeting between "captains of industry" and Gordhan at which the minister of finance was supposed to have recruited big business to help him "clip their (the Guptas) wings" is a "fabrication", "inadmissible hearsay, defamatory, scurrilous, vexatious and vague in the extreme".

Besides, if there really was a plot hatched between Gordhan and business leaders, and Oakbay and the Guptas knew about it, why then have the Guptas' media platforms (ANN7 and The New Age) never reported on it, Gordhan asks in his affidavit.

Oakbay alleges the meeting – which was held on January 28, 2016 – had as its main aim plans to undermine the company.

Gordhan dismisses these claims, and says the meeting was held at the initiative of big business after the World Economic Forum gathering at Davos. The meeting was to discuss measures on how to avoid a ratings downgrade and to address prevailing volatility.

It took place less than a month after Nhlanhla Nene was fired as minister of finance. He was replaced by the unknown ANC MP Des van Rooyen, who lasted four days before being replaced by Gordhan.

Oakbay failed to substantiate its claims that Gordhan "instructed" business to obstruct the Guptas, Gordhan says. It further gives no indication where it obtained the information or how many "credible" sources could corroborate it.

According to the guest list, attached as an annexure to Gordhan's affidavit, the gathering was supposed to have been a stellar meeting of senior industrialists and included almost every bluechip company in South Africa.

It is unclear who exactly attended, but invitees included Maria Ramos (Absa), Mark Cutifani (Anglo American), Cas Coovadia (Banking Council), Andrew McKenzie (BHP Billiton), Brian Joffe (Bidvest), Gerrie Fourie (Capitec), Adrian Gore (Discovery), Michael Katz (ENS), Sipho Nkosi (Exxaro), Sizwe Nxasana (Firstrand), Colin Coleman (Goldman Sachs), Stephen Koseff (Investec), Howard Guy (Massmart), Mike Brown (Nedbank), Koos Bekker (Naspers), Christo Wiese (Pepkor), Gareth Ackerman (Pick 'n Pay), Jannie and Piet Mouton (PSG), Johann Rupert (Remgro), Whitey Basson (Shoprite), Sim Tshabalala (Standard Bank), Markus Jooste (Steinhoff).

Also on the list is Brian Molefe, then-chief executive of Eskom. He resigned in the wake of the public protector's "State of Capture" report which found he had a cosy relationship with Atul Gupta.

Also on HuffPost SA: Watch: Gupta's Money Laundering Allegations Explained In 60 Seconds