Absa turns down government’s invitation to talk about the Guptas

Banking group Absa has reportedly turned down an invitation to meet Minister Mosebenzi Zwane to talk about the closure of bank accounts of business under control of the Gupta family.

On 21 April, Minister in the Presidency Jeff Radebe caused a stir when he said Mines Minister Mosebenzi Zwane, Labour Minister Mildred Oliphant and Finance Minister Pravin Gordhan had been tasked to meet with South Africa’s four biggest banks after the banks had cut ties with Oakbay Investments, owned by the Gupta family.

Standard Bank, FNB, Absa and Nedbank, as well as accounting firm KPMG and sponsor Sasfin Capital, ended their business relations with the Gupta-owned firm, following damning claims of “state capture” from senior government officials.

“Cabinet noted the actions by the four banks that gave notice to close the bank account of a company,” he said. “Whilst Cabinet appreciates the terms and conditions of the banks, the acts may deter future potential investors who may want to do business in South Africa,” Radebe said at the time.

However, Absa declined the invitation to engage with the government on the matter.

“We have respectfully declined on account of client confidentiality,” Absa told Bloomberg on Wednesday. “As a bank we cannot discuss any past, present or prospective clients in such forums.”

Read: Ministers did meet with banks over Guptas, concedes Oliphant

Meanwhile, Reuters reported on Wednesday that more South African companies are pulling out of Gupta-run businesses.

Citing sources close to the companies, it has been reported that at least two more companies in South Africa – Old Mutual subsidiary Mutual and Federal, and fleet management company, Eqstra – have cancelled contracts with the controversial family.

Further, the local branch of Avis has reportedly refused to take on business and rent cars to the Gupta investment group, Oakbay.

According to Reuters, Avis International said there was no order to refuse business from the company in South Africa, and that it would investigate.

The Gupta family and their associated businesses in South Africa have become pariahs in the local market, following accusations from senior political officials that the family was involved with high-level political manipulation.

A number of ministers, former ministers and political figures have claimed that the family – who are personal friends of president Jacob Zuma, and have business dealings with his son, Duduzane – had offered them positions in government in exchange for favours.

Following damning claims from deputy finance minister Mcebisi Jonas, that he was offered former finance minister Nhlanhla Nene’s position before he was fired in December 2015, created a narrative of “state capture” around the family, which is has been unable to shake.

Despite the family having not faced any charges – and many of the claims remain allegations and speculation – businesses in South Africa have distanced themselves from the Gupta name.

Absa, FNB, Standard Bank, Nedbank, Sasfin and KMPG were the biggest names to drop the family in quick succession, making it “impossible” to do business in the country, and to remain listed on the JSE.

The family has since found a new auditing company to represent them, while the Bank of India manages their accounts. The family claims there is a political and financial conspiracy to strong-arm them out of the country.

More on the Guptas

More SA companies turn their backs on the Guptas

Guptas buy R445 million villa in Dubai: report

Guptas tell ANC’s top six of wider conspiracy: report

Guptas ‘backed’ ANC Youth League leader’s bond for R5.4m home: report

Banks’ decision on Gupta company could deter investors – Cabinet

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Absa turns down government’s invitation to talk about the Guptas