While banks reported 72 suspicious transactions to the Financial Intelligence Centre (FIC) before closing accounts associated with the controversial Gupta family and their business entities, the Reserve Bank appears to have picked up one payment only.
Annexures provided as part of Finance Minister Pravin Gordhan’s explosive court application on Friday showed multiple "suspicious" transactions worth R6.8bn — conducted by members of the family and business entities including the unlisted Oakbay Investments, listed vehicle Oakbay Resources and Energy, and television channel Africa News Network — were reported to the FIC.
"The FIC is unable to confirm if these transactions were also reported to the bank supervision department of the South African Reserve Bank," said FIC spokesman Panna Kassan. "Save to say SA’s antimoney laundering and counter [terrorism-financing] regime does not require reporters to file dual reports."
The FIC was created to combat activities related to money laundering, terrorist financing and related crimes.
Gordhan is seeking an order declaring he cannot intervene in the banks’ decisions to close the accounts, and has cited Absa, First National Bank, Standard Bank and Nedbank as respondents, along with the Gupta family’s empire.
Among the 72 transactions was R1.3bn paid to the Bank of Baroda, which is registered in India and has two local branches. Reserve Bank spokesman Jabulani Sikhakhane said cash transfers to domestic branches of foreign-registered banks did not qualify as foreign exchange transactions.
But banks registrar Kuben Naidoo told Gordhan in August the Reserve Bank’s financial surveillance department had flagged a foreign exchange control transaction involving Oakbay Investments associate VR Laser Asia, "which could form the basis of an exchange control-related investigation by that department", following a report from Standard Bank.
Standard Bank declined to comment.
In July, Absa parent Barclays Plc said in its half-year report that Absa had identified "potentially fraudulent activity" by certain customers conducting foreign exchange transfers from SA to accounts in Asia, the UK, Europe and the US. The group said it was keeping relevant authorities informed regarding its investigations into this matter.
Kassan declined to comment on the Barclays disclosure, but said if a bank identified potential fraud, it could report the transaction to the FIC or the police.
Absa spokesman Phumza Macanda said the bank was unable to comment on Barclays’ disclosure and whether this related to the closure of the Oakbay group’s accounts.
Absa received Gordhan’s court papers on Monday and was still studying them.
"We will decide on the course of action after taking legal advice," said Macanda. "We cannot comment in any way on our clients — present or previous — but … in any given year, we close numerous clients’ accounts."
Nedbank and FNB said that they were studying the court application.
It also emerged from Gordhan’s supporting documents that Standard Bank was the last bank to close the family’s accounts, in June, even after reports to the FIC reached fever pitch in April.
Absa severed ties with the Oakbay Investments group of companies in December 2015, followed by FNB and Nedbank
in April.
But a letter included in Gordhan’s court application showed Standard Bank provided services to the companies until late June, when the bank advised that it would be terminating all relationships with Tegeta, an Oakbay subsidiary. This follows a $33m fine levied on Standard Bank’s UK arm for antimoney laundering and bribery violations in Tanzania.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.