‘Gupta bank’ one step closer after R450 million acquisition
The Gupta family is one step closer to re-establishing a foothold in South Africa, with the confirmation that family and business allies, Salim Aziz Essa and Hamza Farooqui, have cleared another hurdle to opening their own bank in South Africa.
The Competition Commission has announced that it has approved the duo’s 100% acquisition of Habib Overseas Bank, which controls over R1 billion worth of local assets. The aim of the acquisition is to establish a new, black-owned bank in South Africa.
“Vardospan” which was created solely for the purpose of the transaction by Essa and Farooqui, reportedly paid Habib Overseas Bank R450 million for the merger to take place.
“The proposed transaction is unlikely to substantially prevent or lessen competition in any market. Further, there are no public interest concerns arising as a result of the proposed transaction,” the Commission said.
According to Farooqui, the only thing left to do top open up the group’s bank, is to get approval from the Registrar of Banks.
The successful opening of a Gupta-friendly bank will allow the controversial family to re-establish a foothold in the country, following the family’s blacklisting from the country’s biggest financial institutions in 2016.
Following explosive allegations about the family using its relationship and influence with president Jacob Zuma to secure government contracts and even place ministers, the Gupta name became poison within the financial sector, leading to Absa, Standard Bank, Nedbank and FNB closing the family’s business accounts.
The blacklisting also caused upset in government, with president Zuma launching an inquiry into the reasoning behind the closures.
This has now become subject to an ongoing court battle, after finance minister Pravin Gordhan – named as one of the ministers part of the inquiry – seeking a court order stating he cannot get involved. Gordhan’s court application has been joined by the banks, which concur with the minister’s position.
In response, the Gupta family has dubbed the court action as a politically motivated smear campaign against them – with the intention being to destroy all their businesses in South Africa.
The family said that it is a victims of the conspiracy, and will prove it in court. The case is set to be heard on 20 January.
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