Court papers filed by Finance Minister Pravin Gordhan that contain details of “suspicious” bank transactions by Gupta-owned companies totalling almost R7 billion may be the first indication that Treasury has put in motion its so-called “nuclear bomb” option.
Gordhan on Friday launched an application in the High Court in Pretoria in the latest development in the ongoing drama around the Gupta family and their alleged abuse of state resources.
Gordhan wants the court to declare that, as Finance Minister, he is in no way obligated to help the Guptas in their battle with South Africa’s largest banks, all of whom had terminated their banking relationships with the Guptas and their companies earlier this year.
In support of his argument that the banks may have had good reason to close the Gupta accounts, Gordhan has attached in his application a document from the Financial Intelligence Centre (FIC) detailing transactions made by Gupta-linked companies between 2012 and June 2016. The transactions are valued at R6.8bn and had been classified by the FIC as “suspicious”.
One such transaction is an amount of R1.3 billion that had allegedly been paid from the mining rehabilitation trust fund of Optimum, the coal mine the Guptas’ Tegeta Exloration and Resources had purchased from international mining giant Glencore under highly controversial circumstances, to the Bank of Baroda, an Indian bank that still does business with the Guptas.
In his affidavit, Gordhan expresses his concern that the Guptas could have appropriated the rehabilitation fund, which according to law should only be used to restore the environment after a mine falls into disuse, for other purposes.
“If those funds from the trust were to (be) spent on anything other than genuine mining rehabilitation, it will expose the fiscus not only to the loss of tax revenue and also put the burden of mining rehabilitation on the fiscus,” argues Gordhan in his affidavit.
In August, as it became apparent that Gordhan might be prosecuted for his role in the running of a supposedly illegal “rogue unit” at the South African Revenue Service (Sars) financial journalist Alec Hogg had written on BizNews that Treasury would consider the so-called “nuclear bomb” option if the persecution of Gordhan neared crisis point.
The nuclear bomb option, according to Hogg’s sources, involved Treasury’s dissemination of damning evidence of corruption involving some of South Africa’s most powerful figures in business and politics.