Is Gupta-linked bank deal on rocks?
The takeover of a small SA bank by a partner of the controversial family may be in trouble, say insiders
Takeover documents reveal for the first time that Vardospan — a company controlled by Salim Essa, a business partner of the Gupta family, and entrepreneur Hamza Farooqui — plans to pay R327m to win control of the Habib Overseas Bank (HOB). This is less than the R450m initially speculated in media reports, but it is still nearly 15 times its profit of R22.7m, which the bank made during its last reported financial year, 2015. The 27-year-old bank, which is headquartered in Johannesburg’s Oriental Plaza, has five branches in SA and only R1.2bn in deposits. This makes it tiny compared to the major banks. But Farooqui told the Financial Mail he has big plans for the bank — including offering Islamic finance products and expanding the technological platform. “Our desire to bring banking services to those outside the economic system isn’t just a by-product of technological progress — it is a core philosophy of ours,” he says. “SA has a jobs crisis which can be addressed if black entreprene...
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