South Africa's largest bank, Standard Bank Group Ltd., filed an affidavit in the High Court in Pretoria, the capital of South Africa, Dec. 14 asking for protection from political interference by the government, Business Day reported Dec. 15.
Standard Bank filed the affidavit in support of a wider application by the country's finance minister, Pravin Gordhan, for an order confirming that his office does not have the authority to intervene in relationships between banks and their clients. The fiercely independent Gordhan has repeatedly come under pressure from others in the government to tackle banks that had closed the accounts of businesses owned or linked to the powerful Gupta family.
Business Day reported that the Standard Bank application went further than Gordhan's in that it asked the court for a ruling that no member of the country's Cabinet may interfere in banking relationships.
Banks began cutting their ties with Gupta-owned businesses, in particular those under the umbrella of the Oakbay Investments holding company, earlier this year as evidence mounted of an improper relationship between them and South Africa's president, Jacob Zuma, and several of his ministers. As a result, companies were unable to settle accounts and pay staff, and senior executives claimed jobs were at risk.
Standard Bank claims in its application that it was summoned to separate meetings with the ruling African National Congress and with a group of government ministers in April and May, respectively, where it was pressurized to reverse its decision to close Oakbay's accounts. At the first meeting with Standard Bank CEO Simpiwe Tshabalala, ANC officials accused the bank of "colluding with monopoly capital to oppress a black-owned business." During the second meeting, the bank says in its affidavit, it was clear that government ministers were "using their political and executive power" to secure an outcome favorable to Oakbay.
The bank further claimed that Oakbay had approached one of its international shareholders alleging that Standard Bank had colluded illegally, and with racist motives, with other banks.
FirstRand Ltd. has also filed an affidavit supporting Gordhan's application.
The Guptas moved to South Africa from India in the 1990s and now have businesses across South Africa ranging from media to mining.