The Bank of Baroda can follow through with its plans to shut down the accounts of 20 Gupta companies by the end of September after the High Court on Thursday (21 September) dropped the family’s case to have the process halted.
The family, through its businesses, approached the courts for an urgent interdict to stop the bank from closing its accounts at the end of the month on the basis that it was unlawful, and would do untold damage to the companies – effectively making it impossible for them to pay workers and continue operating in the country.
Over 7,500 employees would be unfairly prejudiced by the closures, the Guptas argued.
The High Court, however, dismissed the case, with costs, meaning the bank can now proceed with the closures.
It said it was closing the accounts due to reputational damage being caused by doing business with the family.
The account closures at the end of September will mean that no bank in the country is doing business with the Gupta family.
The family has effectively been blacklisted in the country, following reports in the 2016 of widespread state capture. Since the scandal first emerged in the early months of 2016, several investigations and leaks have shown the extent of the family’s influence and alleged business dealings with government and state-owned companies.
According to reports by the Sunday Times, the family’s only hope now to have a banking presence in the country is through the soon-to-be established state bank – Postbank.
Should Postbank begin providing full banking services, the Guptas hope it “will be unbiased and will consider their requests for opening accounts favourably”, said Oakbay Investments acting CEO Ronica Ragavan.
The Guptas have been forced to offload their companies in an attempt to counter the bank account closures. The family agreed in August to sell their shares in The New Age newspaper and ANN7 channel to Lodidox‚ a company owned by Mzwanele Jimmy Manyi‚ for R450 million.
The family has also sold its mining interests (Tegeta) to a Swiss-based shelf company, Charles King SA for R2.97 billion.
In both sales, the purchasers are seen to be allied to the family.