Picture: ISTOCK
Picture: ISTOCK

Salim Aziz Essa, an associate of the controversial Gupta family, and businessman Hamza Farooqui’s bid to buy 100% of Habib Overseas Bank’s South African assets has passed the first hurdle, with the Competition Commission approving the deal without any conditions.

The antitrust regulator said on Sunday it had decided to approve the intermediate merger between Vardospan, a joint venture between two entities each controlled by Essa and Farooqui, and Habib, which handled more than R1.1bn in domestic assets by November.

"The Commission … found no overlap in the activities of the merging parties," it said.

"[Habib] is involved in banking services and Vardospan is newly created for the purposes of the proposed transaction."

"The proposed transaction is unlikely to substantially prevent or lessen competition in any market. Further, there are no public interest concerns arising as a result of the proposed transaction," it said.

Both Cinq Holdings and Pearl Capital, Essa’s and Farooqui’s companies, were registered with the Companies and Intellectual Properties Commission in the middle of 2016.

"Having received Competition Commission approval, the only remaining approval outstanding is from the Registrar of Banks," Farooqui told Business Day on Sunday.

While the Commission said Essa was involved in property, consulting, metal processing, coal prospecting and mining; Farooqui has some financial services experience, and is one of the people credited with the conception of the Old Mutual Albaraka Equity Fund, SA’s first Islamic unit trust.

He also served as a trustee on the insurer’s charitable trust established to donate income not permitted by Islamic law.

Farooqui said his partnership with Essa had cost him business including Old Mutual cutting ties because of the perceived reputational risk.

Essa has a number of business links to Gupta brothers Ajay, Atul and Rajesh; who are said to be close to President Jacob Zuma. The most notable is VR Laser Services, a company within the Gupta family’s Oakbay Investments group of companies, and in which Essa serves as a director.

"Old Mutual cancelled our 13 year business relationship, we have a Shariah-compliant fund — the Old Mutual Albaraka Equity fund — that I co-launched with them, which currently manages funds in excess of R3bn," Farooqui said.

"All the high-street law firms which we used to pass business onto, today cited reasons such as ‘not taking on the street’ as reasons not to act for us." He described these moves as part of "a wider smear campaign by some members of SA’s business establishment, who cannot bear the thought of any competition or new entrant in the financial services sector and one particularly that is black-owned."

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