The Bank of Baroda’s South African unit has been in possession of the "proceeds of crime" linked to the Estina dairy farm project that involved the politically connected Gupta family, said Thato Ntimutse, a lawyer for the National Prosecuting Authority’s (NPA’s) Asset Forfeiture Unit.
While India’s Bank of Baroda has tried to stop the state from freezing R30m of its funds over the dairy farm dispute, it should be noted that the lender has gone so far as to take its own clients, the Guptas, to court to try to sever ties, Ntimutse said in the High Court in Bloemfontein on Friday.
Although state funds intended for the farm may also have gone through other banks in SA, Bank of Baroda has a single current account into which all funds are paid so that legal and illegal money co-mingles, he said.
The case is related to a state-owned farm in the Free State leased to Gupta-linked company Estina in 2012. The provincial government agreed to help develop the land, but on January 19, the high court gave the NPA permission to freeze the project’s assets after more than R220m destined for the farm was said to have been transferred to Atul Gupta and a number of companies and associates. State prosecutors allege Atul Gupta received R10m.
The R30m preservation order is wrong because the money due to clients had already been withdrawn and the attachment of an equal amount of the lender’s own funds was "unsustainable", Luke Spiller, a legal representative for the Bank of Baroda, said in the court on Thursday.
No show Atul Gupta, who did not appear in Bloemfontein on Thursday or Friday, has previously denied in court documents that cash meant for the development of the dairy farm was transferred to his private bank accounts. Bank of Baroda transferred the R10m that Estina paid it into a fixed-deposit account in the farm’s name a few days after first receiving the funds, and they did not go to Atul Gupta, according to his lawyer, Rafik Bhana, who also spoke in Bloemfontein.
"The test is not whether this is money laundering or not, it’s about the R10m," Bhana said. "This is more than about the Guptas. This is about the rule of law." Atul Gupta, who signed his legal documents in Dubai, and businesses linked to his family have applied to the High Court in Bloemfontein to reconsider the assets’ attachment.
Bloomberg
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