NEWS

Oakbay, Tegeta Among 20 Gupta Companies Fighting To Keep Bank Of Baroda Accounts Open

Workers haven't been paid on time.

08/09/2017 11:45 SAST | Updated 08/09/2017 11:46 SAST
Danish Siddiqui / Reuters
The Bank of Baroda headquarters is pictured in Mumbai, India. REUTERS/Danish Siddiqui

The Pretoria High Court will on Friday hear an urgent application against Indian-based Bank of Baroda to keep 20 Gupta-owned companies' bank accounts open.

Fin24 reported that companies including VR Laser Services, Islandsite Investments 188 and Koornfontein Mines have brought an urgent application to interdict the bank from closing down the accounts.

Oakbay Investments, Optimum coal mine, Shiva Uranium, Tegeta Exploration, Westdawn Investments, Idwala Coal and Mabengela Investments are also part of the list.

Many of the businesses have hit financial problems, such as being unable to pay employees and conduct business

Most of these companies has been riddled in financial problems, failing to also pay employees and conduct business in general after BOB announced that it would be closing Gupta family-related accounts by August 31, after five South African banks closed Gupta accounts last year.

Last week, Ajay Gupta's eldest son, Kamal Kant Singhala, had to address workers at the embattled VR Laser steel company, where he gave an explanation about the company's failure to pay weekly wages on time.

A worker representative affiliated with National Union of Metalworkers of SA (Numsa) said employees at the company were anxious because of inconsistencies concerning being paid. Shop steward Lucky Nuleya told HuffPostSA: "We don't get our salaries on time; if these guys [the Guptas] don't have bank accounts, we fear they will skip the country with our money."

Bank of Baroda has had a longstanding relationship with the Guptas and made headlines after being slapped with an R11 million fine for assisting them in their acquisition of the Optimum coal mine from Glencore last year.

The investigation was launched following former public protector Thuli Madonsela's State of Capture report.

In a report, auditors Deloitte (which was appointed by the SA Reserve Bank) found that the BOB disregarded provisions in the Financial Intelligence Centre (FIC) Act related to the bank's lack of verification of the source of funds of the deposits. Another report by the BOB's auditor, Nexia SAB&T, also revealed that other irregularities related to the Optimum transaction were being investigated.

In March 2017, the BOB announced that it would be closing Gupta family-related accounts by August 31, after five South African banks closed Gupta accounts last year.