Government will hound SA banks until Gupta issue is resolved

The government officials tasked with investigating why South Africa’s retail banks severed ties with the Gupta-owned Oakbay in April will not rest until the matter is resolved – even if it means setting up a state-owned bank.

This is according to mining minister Mosebenzi Zwane – one of three ministers tasked with looking into the matter.

According to Zwane, the South African banks in question need to realise that “we are government” and that “we engage until we find a solution”.

“We will continue pursuing them (the banks). Everybody, including Oakbay must enjoy their equal rights,” he said.

All of South Africa’s major retail banks – Standard Bank, Absa, FNB and Nedbank – stopped doing business with Gupta-owned Oakbay Investments and Oakbay resources, following allegations that the family had been using their relationship with president Jacob Zuma to secure business and other favours.

Auditing firm, KPMG was the first company to drop the Guptas, citing reputational concerns, followed by the banks, and the Oakbay JSE sponsor, Sasfin.

Following the exodus, the presidency tasked three ministers – Zwane, finance minister Pravin Gordhan and labour minister Mildred Oliphant – with setting up meetings with the banks to enquire why such action was taken.

The presidency said that the move by the banks, while their prerogative in terms of banking law, had the potential to chase investment away from the country.

Of all the banking groups, government has only been able to successfully meet with Standard Bank, with the other banking groups citing client confidentiality in refusing to engage on the matter.

Mining minister has been reported to be close to the Gupta companies, with claims that he accompanied the groups on business trips to close coal mining deals with Glencore in late 2015. He has since denied those claims.

Of the ministers on the task-team, he has been the most vocal about the inquiry. Speaking to journalists, Zwane said that the meetings would continue until there was resolution- alluding that the government would step in through other means, if necessary.

“We will continue pursuing this matter, even if it means government coming up with a state bank, we will do so,” he said.

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Government will hound SA banks until Gupta issue is resolved