Gupta-linked bank pulls out of SA
The Gupta-linked Bank of Baroda is to withdraw its operations from SA, Fin24 reports. The bank has notified the Office of the Registrar of Banks of its exit and was in discussions to ensure an orderly withdrawal so that no depositor was disadvantaged.
The bank, the Gupta family's financial institution of choice for most of their controversial deals, has come under the scrutiny of regulators, investigators and the press. It was fined R11m by the SARB last year for not doing enough to combat financial crime, which Fin24 says suggested it was involved in the state capture scandal.
Bloomberg reported in October last year that the SARB was investigating Baroda over money held for companies controlled by the politically-connected Gupta family. Bank of Baroda, the only lender in SA that still offered services to companies linked to the Guptas, was seeking a court order that would allow it to close the accounts.
The exit comes soon after the Reserve Bank finalised an inspection of the bank's money-laundering controls, reports BusinessLIVE. It also follows a move by the Asset Forfeiture Unit (AFU) to obtain a preservation order freezing more than R110m held at the bank.
In an affidavit submitted in support of the preservation order in December, AFU financial investigator Nkosiphendule Mradla said the frozen R110m was the proceeds of crime, as it had come from a total R220.2m paid by the Free State Department of Agriculture to Estina, a firm associated with Atul Gupta, for their controversial dairy farm project in Vrede.
The AFU had also targeted the Bank of Baroda as it believed it was highly likely the funds would be moved offshore if the bank succeeded in closing the Guptas' bank accounts, making repatriation impossible. In addition to the fine levied after the inspection, the Reserve Bank slapped the Bank of Baroda with a directive, which its SA head, Manoj Kumar Jha, described as the most severe sanction the regulator could impose before restricting or suspending a bank's business.
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