FERIAL HAFFAJEE: How the Guptas were squeezed out of the market
While that marvellous Oprah Winfrey of fund managers, Magda Wierzycka, has put a bounty on the heads of the Gupta brothers who are on the run, the story of who finally squeezed them out of the market is fascinating. That honour falls to two other revolutionaries. Kuben Naidoo, the activist now plying his trade as the registrar of banks, has been an assiduous watchdog of the Bank of Baroda. And in the name of the famed opposition politician Helen Suzman, those who hold her legacy have held the feet of the Gupta bankers to the fire.
By mid-March, the Helen Suzman Foundation should be in possession of a tranche of documents from Baroda obtained under the Promotion of Access to Information Act. They will provide an X-ray of the Gupta family's money flows and may add to our understanding of how South Africa was captured.
Webber Wentzel attorney Vlad Movshovich has requested and will receive the bank accounts of brothers Atul and Ajay Gupta, their chief lieutenants Salim Essa and Ashu Chawla and business partner Duduzane Zuma, and Public Enterprises Minister Lynne Brown. He has also requested access to business accounts related to more than 20 Gupta corporate entities.
Attorneys for the Bank of Baroda, India's second-largest state bank, agreed to supply the information, telling Movshovich: "Our client is of the view that the requested records would reveal evidence of a substantial contravention of, or failure to comply with, the law."
Read that again. The Gupta family's own bankers accuse them of a contravention of and failure to comply with the law.
Laws on access to information risk running foul of a bank's duty to maintain client confidentiality. Baroda's attorneys addressed this too: "On balance, our client has concluded that the public interest in disclosure outweighs any harm of disclosure."
Now fugitive, the Guptas may not have time to oppose the release of their information, which means it will be released to the foundation and then likely into the public domain.
What a tale those accounts will tell!
Our clients is of the view that the records would reveal....a failure to comply with the law
Earlier this month, Baroda announced it was closing its South African operations as part of a global restructuring, but, in reality, the Gupta taint hurt its operations. The bank faced further action by the South African Reserve Bank, which fined it R11-million in June.
And if Baroda thought it could contain the damage, the influential Hindustan Times, with South African investigative journalists at amaBhungane and Scorpio, let rip with a huge investigation last week. It revealed a tale of regulatory and personal misdemeanours by the bank's local executives.
Soft loans were extended to the Guptas, which were then used to bankroll the family's relationship with the family of former president Jacob Zuma. For example, the bank bonded a home for one of Zuma's wives but did not mark the account as belonging to a politically exposed person.
The Guptas, in turn, did favours for Baroda executives. They parlayed contacts at home affairs to get work permits expedited, and employed the son of a bank manager as an intern. They illegally used mine rehabilitation funds as collateral for loans for the family as it extended its empire of corruption.
Reserve Bank auditors kept up steady pressure on Baroda, as did civil society. As the last bank to strip away the Guptas' facilities, this marked the end of their business in South Africa.
The lesson, again, is that South African institutions and civil society have shown their mettle in fighting state capture, and this lays a solid foundation to fight grand corruption. Now is not the time to take the foot off the pedal - it is a moment to doff a cap at the heroes who protected our democracy.