ON THE MONEY
Bank of Baroda puts its local licence at risk
The Guptas’ bank has some explaining to do over transactions and flow of funds, writes Stuart Theobald
Thuli Madonsela’s report on state capture spells trouble for Bank of Baroda, the last bank that will do business with the Guptas. It appears to have played a central role in the Guptas’ efforts to get their hands on the Optimum coal mine. I have no doubt the Reserve Bank will be animated in investigating and taking action that could include stripping Baroda of its licence. Consider the R2.15bn "letter of comfort" that Baroda provided to the business-rescue practitioners of Optimum and the consortium of banks that held the mine’s assets as security against loans they had made. This letter assured them that the Guptas’ Tegeta was good for the R2.15bn purchase price it had offered for Optimum. But in February, when the letter was apparently produced by Tegeta, the entire deposit base of Baroda was just R1.8bn, according to the bank’s statutory returns to the Reserve Bank. So, there is no way the bank could have been holding R2.15bn for the Guptas. On the face of it, it appears the bank...
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