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Banking & Finance Law
Banking & Finance
A detailed account of how a last-minute, hand-written amendment to a contract forced the Industrial Development Corporation (IDC) to trade R256m for now-worthless shares in the Gupta family’s Oakbay Resources and Energy at inflated prices in 2014 is contained in a lengthy City Press report. It notes the controversial loan restructuring agreement the IDC signed with Oakbay in March 2014 has been made public in the state financier’s belated court application to reclaim the money – and outstanding capital on a 2010 loan – totalling R287.5m.
With the Constitutional Court having refused to hear the R60bn class action suit launched against the major lending banks, the case is heading to the Gauteng High Court (Johannesburg) early in the new year. The class action suit was filed in the Constitutional Court in August by more than 225 applicants whose homes were repossessed and sold at sheriffs’ auctions for a fraction of their market value.
Advocates for the Finance Minister, the Reserve Bank and Absa delivered blistering attacks on Public Protector Busisiwe Mkhwebane’s Absa-Bankorp report in the Gauteng High Court (Pretoria) yesterday, raising serious doubt about her motives, notes a Business Day report.
International law firm Pomerantz has announced it is investigating claims that MultiChoice was involved in securities fraud or unlawful business practices relating to payments to Gupta-owned ANN7, according to a TimesLIVE report. Pomerantz said the claims were being investigated on behalf of investors‚ who could contact Robert Willoughby at the firm.
Eight Gupta-owned companies turned to the Gauteng High Court (Pretoria) in a last-ditch attempt to prevent the State Bank of India from closing their accounts by the end of business yesterday. A Cape Times report says the ninth company – Sahara Computers – recently had its account closed by the bank, but it asked for the decision to be reversed. All nine companies, as in the earlier application against the Bank of Baroda, asked for a temporary reprieve pending an application to be heard later in which they challenge the validity of the notices given by the banks to terminate their relationship.
The cash-strapped, Gupta-owned Oakbay Resources & Energy’s woes have escalated with news that the Industrial Development Corporation (IDC) is suing it for its failure to meet a demand to pay R293m by yesterday. A BusinessLIVE report says the claim arises from the alleged unlawful manipulation of the Oakbay share price ahead of the company’s listing on the JSE in November 2014.
Standard Bank’s efforts to obtain records of the Competition Commission’s probe into collusion among currency traders at 18 banks were thwarted yesterday after the Competition Tribunal ruled it was not entitled to such records, notes a Business Day report. Given ‘the length of the record, the extent of the confidential information in it and the burden it would place on the commission in preparing it, a reasonable time for production would be at the same time as discovery is made in the (foreign exchange) case’, the tribunal said.
Finance Minister Malusi Gigaba reportedly told City Press drastic steps are needed to help the ailing economy – including freezing senior civil servants’ salaries and selling chunks of state-owned enterprises. Gigaba unveiled the surprise moves, which include slamming brakes on the country’s estimated R1trn nuclear build programme. ‘There was a time when it was felt that nuclear is necessary and it must be implemented and programmes were started.
Former director of ConvergeNet, Hanno van Dyk, has been fined R750 000 by the Financial Services Board’s (FSB’s) enforcement committee for his role in a derivatives scandal dating back to 2008, says a Moneyweb report. It notes Van Dyk was one of the directors of a number of companies that took highly-leveraged positions in their own companies’ shares using single stock futures.
Discovery has been granted a banking licence, putting the health and life insurance group a little closer to its goal of establishing a retail bank by 2018. The granting of the licence to NewDisc Limited, shortly to be renamed Discovery Bank, was still subject to certain regulatory conditions, including shareholder and Competition Commission requirements, the company said in a statement recorded on the BusinessLIVE site.
The Gauteng High Court (Pretoria) has interdicted the Bank of Baroda from closing 20 Gupta-linked bank accounts pending the final outcome of their main application, says a BusinessLIVE report. The companies approached the court in September in a bid to have the date of the main application, which was meant to be heard in December, brought forward. Judge Tati Makgoka ordered that the bank not deactivate or close the companies accounts in the meantime. He also ordered that the Gupta companies lodge their final application within 15 days of his judgment.
Home-owners who default on their bond payments should not despair as they will not lose their property if they pay before it is sold. The Star reports this was the message from Gauteng High Court (Pretoria) acting Judge JG Rautenbach, who said people often threw in the towel when they received an order that they had to repay the outstanding bond, as well as an order declaring that the property may be sold so that the bank could recover its losses.
Victims of Internet banking fraud are increasingly fighting their banks in court, notes a BusinessLIVE report which says they’re demanding access to key information to determine who is liable for losses from defrauded accounts. Cape Town businessman and Absa client Johan Holtzhauzen, who was defrauded of R1.6m after his wife’s paid-up bond account and his business accounts were plundered this year, is one of the latest victims to have brought an application for a court order in the Western Cape High Court to compel Absa to give him pertinent information.
Pressure continued to build on Public Protector Busisiwe Mkhwebane yesterday after Absa filed a supplementary affidavit with the Gauteng High Court (Pretoria) in its bid to have Mkhwebane’s findings that it pay back R1.125bn over the apartheid-era bailout of Bankorp set aside. In June Mkhwebane ordered Absa to pay back the money the SA Reserve Bank used to bail out Bankorp, which was later bought by Absa, notes a Fin24 report.
Eskom CFO Anoj Singh was suspended yesterday by the board of directors after lenders threatened to recall their loans if no action was taken against him. A Business Day report recalls that Singh has been at the centre of corruption allegations at Eskom that include providing financial assistance to the Guptas to buy Optimum mine through authorising pre-payments and a R1.6bn guarantee for the finance.