POLITICS

Cabal Of Gupta-Linked ANC Ministers Are Waging War With Banks, Claims DA

The party accuses President Jacob Zuma of using competition authorities as a tool in his agenda of radical economic transformation.

16/02/2017 12:09 SAST | Updated 16/02/2017 13:46 SAST
REUTERS/Rogan Ward
A member of the African National Congress Youth League protests in front of ABSA Bank against what they say is the bank benefitting from an apartheid-era bailout, in Durban, South Africa January 26, 2017.

The Democratic Alliance (DA) claims Gupta linked ANC ministers are waging a war with banks and are willing to use the competition authorities to push a populist agenda of radical economic transformation.

"The fact is that there is a cabal of ANC ministers in Cabinet, clustered around the Gupta-lackey, Mosebenzi Zwane, that wants to do battle with the banks, regardless of the economic fallout. And it was clear from President Zuma's State of the Nation Address last week that he intends using the competition authorities as a tool of his populist and destructive agenda of 'radical economic transformation'," the party's Michael Cardo said.

The banks are Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank NA, Investec Ltd, Standard New York Securities Inc, HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc, Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc, Barclays Bank plc.

Zwane, who is Minister of Mineral Resources, was accused of being part of the Gupta clique in 2016 when he erroneously announced that the Cabinet would recommend to Zuma that he set up a judicial inquiry into the banks after they had closed the family's bank accounts.

He later changed his stance and said he spoke in his capacity as chairperson of the inter-ministerial committee established by the Cabinet after the big four banks withdrew banking services to the Gupta family.

Cardo's statements follow the announcement by the Competition Commission that it has referred a case to the tribunal for prosecution for alleged price-fixing against 17 banks, including three of South Africa's largest banks.

The watchdog has been investigating a case of collusion and market allocation in the trading of foreign currency pairs involving the rand since April 2015.

The commission said it had discovered that for at least nine years, the banks had agreed to collude on prices for deals for spot trades on trading involving US dollar/rand pairings.

Fin 24, which reported the commission was alleging the banks had broken the Competition Act, named the banks.

"The banks are Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank NA, Investec Ltd, Standard New York Securities Inc, HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc, Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc, Barclays Bank plc (Respondents)."

The ANC on Wednesday said the acts of corruption the banks have been accused of have exposed the ethical crisis in the South African banking sector. It said the act of manipulating the currency was an attack on the constitutional mandate of the South African Reserve Bank to protect the value of the South African currency.

"The African National Congress takes an extremely dim view of the activities of the listed banks, understanding the banking sector as being instrumental to our quest for economic growth and development. The profit-driven assault on the South African rand through such collusion and corruption by the banks flies in the face of efforts by the South African nation to prosperity for all. It is further an indication of how the markets are and can be manipulated by dominant oligopolies to cripple its functioning to suit their nefarious agendas. Without a doubt, it further raises a question of the extent to which the currency was manipulated with politically motivated intentions," spokesperson Zizi Kodwa said.

He called on the Competitions Tribunal to level the harshest sanctions against the banks where they are found guilty, serving as a deterrent to any other players in any other industries involved in similar activities.

Cardo said the party took collusion very seriously, as it works against fairness and opportunity but the ANC has already prejudged the outcome of the case, accusing the banks of a profit-driven assault on the Rand, fueled by nefarious agendas and politically motivated intentions.

"The law should now be allowed to take its course. Both the Competition Commission and the banks should be allowed to state their case. And the Competition Tribunal should be able to test the evidence and adjudicate accordingly, without fear, favour or prejudice, in terms of its mandate as an independent institution subject to the constitution and the law," he said.

The Economic Freedom Fighters (EFF) echoed the sentiments of the ANC calling for maximum sanctions provided for in the competition legislation in South Africa. EFF spokesperson Mbuyiseni Ndlozi said they will write to the South African Reserve Bank to demand that the banking and operating licences of the banks be discontinued immediately.

"We believe collusion around South Africa's currency is treacherous and should be treated as such. The EFF has been at the forefront of fighting financial crimes in South Africa and we believe that the revealed scandal of the colluding banks must be dealt with decisively. Politically, the South African government must commence processes of establishing a viable, efficient and sound state bank which will insulate our country from the callous thirst for maximum and immoral profits pursued by the existing bank," he said.

He called on the government and all state institutions to disassociate themselves from the banks that are involved in collusion.