SA’s banks are poised at a legal crossroads: should they blow the lid on exactly what the Gupta family did, or should they keep their powder dry in case the family takes legal action later? Within days, the banks must file legal papers in the lawsuit lodged last month by finance minister Pravin Gordhan, in which he included Financial Intelligence Centre (FIC) records detailing R6.8bn of "suspicious transactions" involving the family.
These transactions, it seems, led SA’s banks to ditch the Guptas as clients. It sparked a political backlash as the family’s lackeys demanded the banks provide "answers". This was a predictable response: after all, if your business model is crony capitalism, you have to be able to wield this influence when you need it.
So Gordhan is now asking a judge to make a ruling clarifying that he isn’t actually entitled to intervene in the relationship between banker and client.
Only, the bankers are still undecided if they should take up Gordhan’s invitation to dish the dirt. "If we decide to spill the beans on individual transactions, your hair will stand on end," says one senior banker.
"Sure, it may indeed be in the public interest to know why these accounts were closed, but the Guptas may yet decide to take legal action, or we may get asked to provide evidence in the judicial inquiry (recommended by Thuli Madonsela). So we’re not sure whether it would be appropriate to reveal all now."
The other option is for the banks to take the meek approach: simply file papers saying they "support" Gordhan’s view that the banks can’t intervene.
An executive at another bank explains: "This isn’t a review of our decision to get rid of the Guptas. All we need to say is whether we support the minister in his application — which we do. We don’t have to get into the mud of every single transaction."
Already, it seems some banks have taken this tack, notifying the Guptas’ lawyer, the outspoken Gert van der Merwe, of their intention to argue this way.
Van der Merwe has been everywhere in recent days, painting a picture of the much-vilified family as falsely accused, upstanding folk besmirched by the Salem Witch Trial-like slander in the media.
With no little bravado, Van der Merwe says the Guptas will demand the FIC reveals the full list of transactions — names and dates. "We want to deal with each and every transaction. So we have asked every bank for that information but we haven’t received it. We’ve also asked the FIC for it, but they’ve said we’re not entitled to that information," he says.
But isn’t this playing with fire? If this list shows any impropriety, it won’t exactly help the family’s case.
"Well, my client says there’s 0% chance of any impropriety. Ajay Gupta in particular has said as much. That’s why we’re asking for the full list, and we’re happy to share that with the newspapers," he says.
For Van der Merwe personally, it seems like a big gamble to be hitching his reputation to the Guptas’ lurching wagon. He doesn’t see it that way, though.
"Not at all. I see this as a golden opportunity to present the facts," he says.
This sets the scene for a rip-roaring shootout.
Says one banker: "Those transactions flagged didn’t include who that money was sent from, and who it was going to. I can tell you, given those names, the Guptas really don’t want this to be coming out."
Some curious anomalies
So here’s where this debacle could lead: the FIC reports appears to show instances where immense amounts of money flowed through company accounts which seem suspiciously higher than the amounts you’d expect to see in those accounts.
Take, for example, Shiva Uranium — the Klerksdorp mine which until this year was the only asset of the JSE-listed Oakbay Resources. On a single day, April 7, R125.8m washed through Shiva’s account. Days later, on May 6, another R327m went through Shiva’s accounts, followed by another R510m days later.
However, because Oakbay’s accounts are public, we know that for its last financial year to February, the company’s entire revenue amounted to only R273m. And that’s before expenses — like staff, buying mining equipment and repaying its loans. In the end, Oakbay produced a pretax profit of only R1.49m.
So is this the kind of company, you wonder, that should legitimately be witnessing hundreds of millions of rand flooding through it within 24-hour periods?
Fingers crossed that the banks decide to reveal all. But even if they don’t, you can expect answers to emerge now that Pandora’s Box has been opened.