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Where is Gupta R1.5bn stash?

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An affidavit by Finance Minister Pravin Gordhan appears to reveal that the Department of Mineral Resources withheld information related to its approval of the transfer of R1.5-billion from a trust account intended for the rehabilitation of the Gupta-owned Optimum Coal Mine to India’s Bank of Baroda.

Mineral Resources spokesman Ayanda Shezi, in response to two media inquiries, denied in July that the department had approved the transfer of money from the trust, and that a transfer had been effected. The transfer was one of the R6.8-billion worth of dubious Gupta transactions referred to the Financial Intelligence Centre by banks and exposed in court this week.

Correspondence included in court papers filed by Gordhan reveals that the department had approved the transfer of the trust and its funds from Standard Bank, in South Africa, to the Bank of Baroda in India three weeks earlier.

The political head of the department of Mineral Resources Minister Mosebenzi Zwane, who has been accused of doing favours for the Gupta family, would have had to approve the decision. The letter, from Werksmans Attorneys, who were acting on behalf of Optimum Coal Mine’s joint business rescue practitioners, was addressed to the Reserve Bank and dated June 27 2016.

It said that the department had approved the transfer on condition that the recipient bank was registered in South Africa. Baroda, with two branches in this country, is registered with the Reserve Bank as a branch of a foreign bank.

Shezi’s denials raise questions about whether due process was followed in granting the approval for the transfer of the trust and its funds to a foreign bank.

The Guptas have gained notoriety for allegedly exploiting their closeness to President Jacob Zuma, who has maintained that his friends have no undue influence over him.

Gordhan felt sufficiently concerned about the approval to raise it in his affidavit to the court.

The money in the trust is intended exclusively for the rehabilitation of the Optimum mine.

“If those funds from the trust were to be spent on anything other than genuine mining rehabilitation, it will expose the fiscus not only to loss of revenue [but] put the burden of mining rehabilitation onto the fiscus,” he said.

Gordhan filed the affidavit in support of his application to the Pretoria Gauteng High Court for a declaratory order on whether the Treasury could mediate between South African banks and the Gupta family after several of the banks said they would no longer do business with Gupta-owned companies.

The trust is one of several Gupta-linked entities flagged by the banks for suspicious transactions totalling R 6.8-billion, Gordhan said in his affidavit.

Referring to the purported approval of the R1.5-billion transfer of trust funds to India, Gordhan notes in his court papers that he did not know if the transfer had been effected.

Yesterday Shezi said the department did not have enough time to respond to questions.

“The information required is still being gathered. Realistically, a response can be provided tomorrow.”

Two independent sources close to the transaction confirmed to the Sunday Times in mid-July that the money in the trust had indeed been transferred to the Bank of Boroda. One said there was R1.75-billion in the rehabilitation account in July and R1.5-billion was transferred to the Bank of Baroda.

Large tranches of the R2.2-billion the Guptas paid for Optimum in April came from the Bank of Baroda.

Another Gupta-owned company whose transactions are mentioned in Gordhan’s affidavit is Shiva Uranium mine — of which suspicious transactions this year amounted to more than R968-million.

The Industrial Development Corporation lent the Guptas the majority of the R250-million to buy a 74% stake in Shiva mine in 2010. President Jacob Zuma’s son Duduzane has shares in the mine.

Meanwhile, the JSE has said it will “immediately engage with the sponsor of Oakbay Resources and Energy on the allegations, in terms of the Listing Requirements”.

[Source: Times Live]
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