In what has been described as possibly one of the largest cases of bank money laundering in the country, Indian bank The Bank of Baroda – which has been accused of covering up large value transaction on behalf of the Gupta family – will have legal action instituted against it.
The Democratic Alliance this morning said that it would be laying charges against the South African branch of the bank for possibly laundering money on behalf of the Gupta family.
This followed the outcome of a report compiled by the Organised Crime and Corruption Project, which contained damning allegations against the bank.
Its findings include:
• Some transactions and deposits lacked required documentation and, where information was provided, it was either inconsistent or incorrect;
• There were also millions of back-to-back intercompany loans with no legitimate business or legal purpose, in what seems to have been an attempt to disguise the origins of the money; and
• The cash flowing through Gupta family accounts dominated the transactions of the entire Bank of Baroda branch in Johannesburg.
“The Bank of Baroda continued to allow the Guptas’ activities until January this year, when a South African court ordered it to share information about the accounts of more than 20 Gupta-linked companies. This was prompted by a Public Access to Information Request filed by the Helen Suzman Foundation, a local non-govermental report,” the international Organised Crime and Corruption Project report said.
The bank first landed on South African shores when it opened its branch in Durban in 1997. It has since expanded its reach in South Africa and has offices in Sandton.
The bank announced last month that it would be closing its operations by the end of March.
“In view of the bank’s strategic plan for rationalisation of the branches in international markets, the management of the bank has decided to cease the banking operations in South Africa territory.”
Gupta-owned companies have now sought the help of the high court in interdicting the bank from closing its doors, citing reasons that the bank would be in breach of an interdict, which in December, ordered it to continue doing business with the Guptas.
In September last year the bank was fined R11 million for its role in assisting the Gupta family in acquiring the Optimum coal mine from Glencore in 2016.
In March last year the bank announced that it would be closing the accounts of the Gupta family members, after five South African banks closed the Gupta accounts.
The bank also issued a press statement in relation to the media reports surrounding the Gupta family’s involvement in the bank.
“In this regard we would like to clarify that the South African operations of Bank of Baroda have always been conducted in accordance with the laws and regulations of the South African Reserve Bank and the Reserve Bank of India. We reiterate that the bank has at all times acted in good faith and all activities of the bank have been conducted in a professional and transparent manner,” the bank said.
The DA believed the allegations should be thoroughly investigated.
“We will now proceed to lay charges against the Bank of Baroda, in terms of Sections 29 and 52 of the FIC Act,” DA public enterprises spokesperson Natasha Mazzone said.