Another bank ditches Guptas

2017-07-02 06:00

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

A fifth South African bank has closed the accounts of the controversial Gupta family.

The Venda Building Society (VBS) Mutual Bank is the latest to decline to do business with the Guptas, closing two of the family’s accounts.

VBS is the same bank that granted President Jacob Zuma a loan of R7.8m so that he could repay the state for his portion of the bill for security upgrades to his Nkandla home, as ordered by former Public Protector Thuli Madonsela.

The two accounts – both business accounts – were terminated in January following deliberations by the bank’s bosses.

The bank sent a terse letter, dated March 9, addressed to Ronica Ragavan, acting chief executive of Oakbay Investments, the holding company for the Gupta family’s businesses in South Africa.

The letter reads: “Please be advised that VBS Mutual Bank, in line with our risk appetite framework, has declined your request for new accounts applied for and [your] continued relationship with the bank.”

The letter goes on to explain that the Guptas’ accounts would remain open until May 22, “after which your existing accounts will be deactivated”.

“Please provide the bank with bank account details [of another financial institution] to which funds from all you accounts will be transferred,” the letter reads.

VBS spokesperson Ndivhuwo Khangale declined to provide further details, saying: “We’re guided by the bank-client confidentiality clause and cannot comment on those issues.”

City Press, however, understands that the VBS board declined the Guptas’ reapplication for new accounts after its automated financial security risk system was activated in January and kicked them out for being “politically exposed”.

“The risk office picked up that these guys opened two accounts with the Johannesburg branch when the system warned that they were a risk. When a bank has such clients, it is more work to track their transactions,” said a source close to VBS.

“It’s not a lot of money they had deposited and they were not the bank’s top clients. The issue is that, unlike a single transaction like the president’s bond, they would have a lot of transactions,” the source added.

It is unclear exactly when last year the Guptas opened the accounts.

The Guptas’ banking woes started last year when all four of the country’s major banks declined to do business with the family’s companies, without providing reasons.

The family’s audit firm, KPMG, also terminated the relationship with the Guptas’ companies.

The Guptas and their lieutenants, including former Oakbay chief executive officer Nazeem Howa, tried to pressure former finance minister Pravin Gordhan to intervene in their banking crisis, and Gordhan was forced to approach the Pretoria High Court for a declaratory order confirming that, legally, he was not able to do so.

Mining Minister Mosebenzi Zwane, who is thought to be a Gupta deployee in Cabinet, also tried to intervene on the family’s behalf.

Attached to Gordhan’s court papers was a certificate from the Financial Intelligence Centre detailing 72 suspicious transactions totalling R7bn that the Guptas and their companies had allegedly made, indicating why they could have problems with the banks.

Their banking troubles forced the Guptas to try to buy their own bank through their business associate, Salim Essa.

The bid failed, however, because Essa’s company, Vardospan, failed in its court bid to force Treasury and the SA Reserve Bank to make a decision on their application to buy the bank in a R450m deal.


Do you think the Guptas’ banking troubles will bring them down, or will they also survive this?

SMS us on 35697 using the keyword GUPTA and tell us what you think. Please include your name and province. SMSes cost R1.50

Read more on:    business  |  guptas

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

Competition regulation for a growing and inclusive economy

ADVERTORIAL: The Competition Commission of South Africa is conducting advocacy work in the South African automotive aftermarket industry and has gazetted a Draft Code of Conduct for public comment.


Man scores date with tennis superstar after Twitter bet

It’s a modern day Cinderella story, but one American man took ‘shoot your shot’ seriously in 2017.


You won't want to miss...

6 myths about male cancer
Who are the highest paid models of 2017?
10 gorgeous plus-sized models who aren't Ashley Graham
5 top leg exercises for men
Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.