South Africa’s First National Bank is the fourth bank or financial services group to sever financial ties with the South African-Indian Gupta family’s company, Oakbay Investments, amid a scandal over the family’s relationship with President Jacob Zuma.
Others that said they’re severing financial ties with the Gupta family include Absa, a South African subsidiary of U.K.-based Barclays; financial services firm KPMG; and South African investment bank Sasfin.
Longtime friends, the Guptas and Zuma have been linked over allegations that the family exerted undue influence over the state.
The Guptas are being investigated by the ruling African National Congress and the state corruption ombudsman. They have denied any wrongdoing, Bloomberg reported.
The entrepreneurial Gupta family owns Johannesburg Stock Exchange-listed Oakbay Resources & Energy and other businesses in South Africa.
Brothers Ajay, Atul and Rajesh aka Tony Gupta, all in their 40s, moved to South Africa from India in 1993 as white minority rule was ending and the country was opening up to the rest of the world, BBC reported.
They were small businessmen In India but their parent company, Sahara Group (no relation to the Indian giant of the same name) now has an annual turnover of about $22 million and employs 10,000 people, according to BBC.
Bongi Ngema-Zuma, one of Zuma’s wives, worked for the Gupta-controlled JIC Mining Services as a communications officer. Duduzile Zuma, Zuma’s daughter, was a director at Sahara Computers. Duduzane Zuma, Zuma’s son, is a director in some Gupta-owned companies. The Guptas have interests in computers, mining, air travel, energy, technology and media.
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Financial services firm KPMG said last week it was severing ties with Oakbay while Absa, a South African subsidiary of U.K.-based Barclays, discontinued its service in December, htxt reported.
South African investment bank Sasfin spokeswoman Cathryn Pearman said the bank had resigned as Oakbay advisers effective June 1, TimesLive reported this week.
First National Bank (FNB) said it was closing all Oakbay’s accounts, BusinessTech reported. KPMG was the auditor for all Gupta-owned and-controlled businesses and performed a variety of other services for the Guptas.
“In our view, the association risk is too great for us to continue,” KPMG CEO Trevor Hoole told staff in an internal email, according to BusinessTech. “There will clearly be financial and potentially other consequences to this, but we view them as justifiable.”
In a statement Wednesday, Oakbay said it has received no reason to justify FNB’s actions. “We are already in the process of moving our accounts to a more enlightened institution,” Oakbay said.
Oakbay and the Guptas have been noticeably quiet about their public reputations since this year’s State Of The Nation address in Parliament, htxt reported. During the adddress, Economic Freedom Fighter party leader Julius Malema coined the now popular #zuptasmustfall. The Guptas said just 1 percent of Oakbay’s business is with the South African government.
Malema said earlier this year he could not guarantee the safety of journalists who work for the Gupta media outlet, ANN7, if they attended an EFF-organized event. Malema said that the Economic Freedom Fighters would see the Gupta family removed from South Africa, TheSouthAfrican reported.
The Gupta family responded by filing an injunction in court, saying Malema and the EFF threatened violence and xenophobia. This included “threats issued … to solicit violence from its members.”