31/03/2017 14:26 SAST | Updated 31/03/2017 15:29 SAST

Vardospan To Go Ahead With Plans To Buy Bank Despite Losing In Court

The Gupta-aligned company still wants to pursue the creation of a '100% black-owned challenger bank'.

SA Reserve Bank governor Lesetja Kganyago
REUTERS/Siphiwe Sibeko
SA Reserve Bank governor Lesetja Kganyago

Vardospan, the Gupta-aligned company which went to court this week to have its attempts to buy a bank approved, still plans to continue trying to create a "100 percent black-owned challenger bank" despite losing in court on Friday.

Vardospan, headed by Gupta associates Hamza Farooqui and Salim Essa, filed an urgent application in the high court on Monday. Vardospan wanted the court to review and set aside what it says was a failure on the part of the South African Reserve Bank (SARB) and Gordhan to give the company an answer as to whether or not it would be allowed to buy a majority stake in Habib Overseas Bank.

At a press conference on Friday, Gordhan responded to accusations that he dragged his feet on the issue. He said he had not done that, but there were processes that had to be followed, including determinations by the banking regulators.

The Competition Commission had approved the merger but Vardospan needed regulatory approval by Friday March 31. The application was struck from the roll on Friday by North Gauteng High Court judge Ronel Tolmay who said the matter could not be now. She said the applicants had "brought their own demise" by "bringing the application at the eleventh hour".

In a statement shortly after the ruling, dealing with what he called "attempts to create a 100 percent black-owned challenger bank, Farooqui noted that the application was struck from the roll due to its lack of urgency.

"In other words, the court found that the facts and circumstances of the case did not entitle Vardospan to an urgent determination of the merits in the application on the urgent court roll. This means that the merits of the application have not been determined and remain alive," he said.

"The application can now be pursued in the ordinary course and not as an urgent application. The parties to the sale of shares agreement are still at liberty to agree and extend the 'long stop date' of the sale of shares agreement beyond 31 March 2017. SARB and the Finance Minister are also nonetheless still required to take a decision in the applications for permission.

"I, and Salim Essa, are in for the long haul, and am not going away. This country needs more 100 percent black-owned challenger banks and it is my dream and vision to create one, whether it takes three months, three years or 10 years."