A South African court dismissed the application of about 20 companies linked to the Gupta family seeking to keep their accounts open at Bank of Baroda, Bloomberg News reported Sept. 21.
The India-based bank notified the companies July 6 that their accounts would be terminated within 11 days and all loans recalled by the end of September. The lender later agreed to extend the account closures until Sept. 30, following talks.
The lender decided to close accounts linked to the Gupta family after it was hit with a fine of 11 million rand in June and issued a directive, following an investigation that concluded Bank of Baroda did not comply with financial crime laws. A directive is the most serious sanction imposed on banks in South Africa before its license is suspended or withdrawn, Bloomberg cited Manoj Kumar Jha, Bank of Baroda's acting South Africa CEO, as saying.
A number of banks including South Africa's four biggest banks, Bank of China Ltd., Bank of India and State Bank of India, have shut the Gupta family's accounts over concerns they would be found in violation of the law.
The Gupta family is said to have close ties to South African President Jacob Zuma and one of his sons, and has been accused of exerting influence over state affairs and the awarding of government contracts to Gupta-owned companies.
Following the Pretoria High Court's decision, South African civil society group Organisation Undoing Tax Abuse said it will file an urgent application against Bank of Baroda to freeze rehabilitation trust-fund accounts associated with the Gupta-owned Optimum and Koornfontein coal mines. The organization wants to ensure that 1.75 billion rand of funds, directed to be used to restore environmental damage in and around the mines, does not leave the country.
As of Sept. 21, US$1 was equivalent to 13.28 South African rand.