In meddling with the banks on behalf of the Guptas, the ANC besmirched its legacy

Viewed through the lens of the Zondo Commission of Inquiry into State Capture, the ANC looks weathered and divided, a shadow of the political party whose leaders helped modernise South Africa’s banking and financial system.

Testimony by the banks this week reveals an evisceration and a step away from the ANC’s identify as a party of the rule of law.

While the head of the party’s economic transformation committee, Enoch Godongwana, is an affable and friendly man, evidence on Tuesday by former Rand Merchant Bank CEO Johan Burger that he had been asked or summonsed to a meeting by the official by text message begs the question: how seriously does the party take its history and role as a steward of society?

There is something insouciant and casually careless about Godongwana messaging Burger to set up a meeting to inquire why the bank had been one of four which revoked bank accounts of the Gupta family and related entities.

Godongwana has good relationships with many business leaders and probably has many of the Top 100 company CEOs on speed dial, but the decision to intervene in the banks’ decision to close Gupta accounts is a serious one. Was it fitting of a governing party and one with as long a history as the ANC to arrange that meeting at all and then to do so by text message?

As several banking executives said at the commission this week, the ANC’s decision to step in was a step-change in banking regulation and a highly risky one. The party summonsed banking executives to Luthuli House while former Mineral Resources minister Mosebenzi Zwane used an inter-ministerial committee purportedly created by Cabinet to pressurise the banks too.

“In my 32 years in banking, I’ve not had a third party questioning client/banker relationships,” Burger told Zondo.

Burger was the only one of the four big bank CEOs who did not attend either the meeting with the ANC or another meeting with Zwane’s inter-ministerial committee to also probe why the banks had closed the accounts.

This means the banks were subjected to two levels of pressure by the ANC on behalf of a single family shown to be close to former president Jacob Zuma.

At a Business Leadership SA meeting in 2016, then ANC secretary-general Gwede Mantashe met ABSA CEO Maria Ramos and asked her to a meeting to discuss the bank account closures.

A day later, she attended the meeting at Luthuli House, where she warned Mantashe that “it will be a very short meeting” if anything related to client confidentiality was to be discussed.

South Africa became part of the inter-governmental Financial Action Task Force (FATF) run out of the OECD. This led to the passage of the country’s financial intelligence laws and to the establishment of the Financial Intelligence Centre.

These laws prevent international crime and money laundering and provide the kind of X-ray vision that ultimately ensured that the Gupta family’s various efforts to launder and corrupt were exposed.

The creation of the modern banking system can be credited to a new democratic government led by the ANC, but this week’s evidence before the Zondo Commission showed how the party’s actions put this legacy of creating a modern financial system at risk.

“Non-compliance (with global banking regulations) can lead to the revocation of a (banking) licence and personal criminal liability… there was evidence of large unexplained transfers of funds between Oakbay and related parties at other banks,” Yasmin Masithela, ABSA’s head of strategy, told the Zondo Commission of Inquiry.

ANC officials say the party was not interfering or pressuring the banks when it called them to Luthuli House. They said that the party regularly meets with business leaders, either at the request of these captains of industry or by asking for meetings with them.

One official at Luthuli House said it called the banks to find out how the system of banking politically exposed persons (PEP) worked – banks deal with this category of people as higher risk clients. The Gupta family were classified as PEPs.

The officials said that Luthuli House under Mantashe had, in fact, acted as a bulwark against the growing influence of the Guptas. Mantashe spoke out when the Guptas landed a private plane of wedding-goers at Waterkloof in 2013.