The government is not setting a dangerous precedent, nor is it bullying the banks, by stepping into the dispute between Gupta-owned Oakbay Investments and the big four South African banks, Jeff Radebe, Minister for Planning, Monitoring and Evaluation, told journalists on Thursday.
Radebe had to field a barrage of questions following his announcement that a team consisting of the ministers of finance, mineral resources and labour had been established to investigate why the banks decided to close the bank accounts of Oakbay Investments, the holding company for the Gupta family’s businesses in South Africa.
One journalist asked Radebe how government could justify meddling in the affairs of banks, suggesting it came down to “bullying”. “Will you do the same for any other small business who has a problem with the banks?”.
We are not interfering – Radebe
“It is interference? No, that is why the team of ministers will be interacting with the banks to find out the facts in this matter,” Radebe answered.
Radebe opened a can of worms when he said Mines Minister Mosebenzi Zwane, Labour Minister Mildred Oliphant and Finance Minister Pravin Gordhan would meet with the banks to find out why they don’t want to have a certain company as their client.
He said Cabinet was concerned that this move could deter future investors who want to open South African bank accounts.
“Cabinet noted the actions by the four banks that gave notice to close the bank account of a company,” he said. “Whilst Cabinet appreciate the terms and conditions of the banks, the acts may deter future potential investors who may want to do business in South Africa.
“Cabinet has endorsed that the ministers of Finance, Labour and Mineral Resources should open a constructive engagement with the banks to find a lasting solution to this matter.”
Radebe defends Mines minister
On whether it was “wise” to have Zwane as part of the delegation, given allegations of an untoward relationship with the Gupta family, who owns Oakbay, Radebe side-stepped the question and merely said: “Yes, he is part of the delegation”.
He maintained that the three ministers’ “interaction” with the four banks were “normal”.
“Government and the private sector meet all the time. There is nothing extraordinary about this.”
Radebe said it wasn’t an investigation: “Those ministers will be meeting and interacting so that they get the information”.
‘They are big girls and boys at the bank’
“It’s a normal interaction. We are not bullying them. They are big girls and boys at the bank; they can never be bullied by anybody.
“Interaction between government and the private sector happens all the time, for example presidential working groups. So there is nothing extraordinary about this.”
On whether the government won’t be setting a dangerous precedent by interfering in the banks’ decision to close bank accounts, Radebe said “there is no precedent that has been set”.
“This is a normal task team that meets from time to time if there is an issue that has to be looked at.”
On whether it will happen in the future that other companies can ask government to get involved in disputes with banks, he said: “It depends what the query is, as far as I’m concerned”.
The move comes as Oakbay announced it had found a new auditor – SizweNtsalubaGobodo – after KPMG cut ties with all Gupta-owned companies in April.
KPMG was joined by the top four banks and Oakbay’s JSE sponsor Sasfin Capital, who revealed they were cutting ties or had given notice to do so.
Oakbay Investments CEO Nazeem Howa told staff in a letter that the closure of its bank accounts “made it virtually impossible to continue to do business in South Africa”.
“Without bank accounts we may find ourselves in a position where we are unable to pay you‚ our valued employees,” he said. “We are doing everything in our power to ensure this does not happen.
“We find it totally unacceptable that you‚ our employees‚ and your families could potentially have to suffer as a result of the political campaign against us.”
Oakbay has been trying to keep the focus on the 7 500 jobs at risk at Oakbay, while their owners – the Guptas – resigned from all positions and jumped on a plane to Dubai with a plane filled with suitcases.
In the meantime, Oakbay has managed get approval for its acquisition of Optimum coal mine from Glencore this month, paying R2.15bn to clear its debt.[Source: News24]