SA court to rule if Baroda can be forced to bank Gupta-linked companies
Ajay Gupta. File Image Ajay Gupta. File Image
PRETORIA - The North Gauteng High Court is on Monday expected to deliver its judgment on the matter in which 19 Gupta-inked companies want it to compel the Bank of Baroda to continue offering services to them even though it has already indicated that it wants to close its South African branch.
The Indian state-owned international bank has cited its fading relationship with Nedbank a the reason it wants to close its SA branch.
In January, Nedbank informed the Bank of Baroda that it would terminate their relationship within three months. This means that from 1 April 2018, Baroda would not have banking facilities with Nedbank - on which it relies to provide banking services to its own clients.
As a result of the termination, Baroda announced that it was going to shut down its local branch. It also said it was cutting ties with Gupta-linked companies by 31 March.
During heads of argument at the last court appearance, advocate Owen Cook, representing the companies, said Nedbank was being used as an excuse.
He said Baroda, which was given a notice period, failed to challenge Nedbank's decision.
Cook said it is imperative for the bank to continue providing banking services to the Gupta family's companies in order to shield about 7,000 employees.
Legal representative of the bank, Azhar Bham, told the court that it was unfair to make the bank stay in the country just to serve the Guptas. Bham said when other banks in the country closed accounts belonging to Gupta-linked companies "they did nothing".
The whereabouts of Gupta brothers Ajay, Atul and Rajesh, who are close associates of former president Jacob Zuma and his son, Duduzani, remain unknown amid speculation they are fleeing from SA Authorities. Atul Gupta has been named as a fugitive from the law.
Judge Ntendeya Mavundla said the fundamental question to answer was if the court can keep the bank in the country open and operating against its will.