Report: Another bank seems to be closing its doors on Gupta-controlled companies

Bloomberg is reporting that according to three confidential sources, the Mumbai-based lender is winding down its relationship with companies related to the Gupta family to ensure it is in compliance with banking rules.

If the bank closes the accounts of the Gupta controlled companies, they will be the latest financial institution to do so after South Africa’s major banks closed accounts associated with the family last year.

The closure of the accounts is now the subject of a court case involving Finance Minister Pravin Gordhan who has been under pressure to intervene, both from Gupta representatives and from within government.

Gordhan, in an affidavit, has revealed how R6.8-billion in “suspicious and unusual transactions” may have contributed to the decision by South Africa’s four major banks to close accounts associated with the Gupta family.

The family is opposing Gordhan’s application with their lawyer saying there was nothing untoward about the transactions.

In January, court papers filed by Gupta-linked steel-maker VR Laser revealed that the Bank of China also closed its bank accounts after demanding that it remove the Guptas as shareholders because of perceived political risk.

The company supplies steel products to arms maker Denel and had approached the Bank of China after Nedbank and Standard Bank, citing reputational risk, closed its accounts.

The Guptas stand accused of using their friendship with President Jacob Zuma to influence cabinet decisions and government contracts. These allegations have been denied by the family.

In response to questions posed by Daily Maverick, Oakbay Investments said “the reports are not correct”.

“We can only imagine that the sources relied on by Bloomberg had their own agenda, and want to put pressure on the Bank of Baroda. This is just more evidence of a campaign, by some, against Oakbay based, as usual on nothing more than innuendo.

A Mumbai-based spokesman for the Bank of Baroda didn’t immediately respond to an email and two calls to his office phone, Bloomberg said. DM

Photo: Atul Gupta.