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Nedbank was asked to 'save jobs' by becoming Gupta banker

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Nedbank was asked to 'save jobs' by becoming Gupta banker

 Nedbank was asked to 'save jobs' by becoming Gupta banker

19th September 2018

By: African News Agency

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The then minerals resources minister, Mosebenzi Zwane, pressured Nedbank to take over banking services for the controversial Gupta family and ''save jobs'' after other major banks closed their business accounts in South Africa.

Nedbank CEO Mike Brown told the State capture commission of inquiry on Wednesday that he was requested to a meeting with the inter-ministerial committee (IMC), led by Zwane.

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Brown was accompanied by two other executives at the meeting held at Zwane's office in Pretoria in May 2016.

Brown said Zwane opened the meeting and expressed dissatisfaction that some banks refused to attend IMC meetings, and then proceeded to talk about the powers of the committee. Brown said he felt this was ''a veiled threat''.

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Brown said despite his insisting that the relationship with bank's clients can never be discussed, Zwane delved into the closing of the Gupta accounts.

''I felt that numerous references to [banking] licensing regime was pressure put on the bank. At the closing of the meeting, Zwane requested Nedbank to take over banking transactions and become Gupta banker, since all banks closed their accounts,'' testified Brown.

It turned out that Zwane was the only minister at the meeting.

Brown said the invitation sent to the bank had stated that the IMC consisted of Zwane, then communication minister Faith Muthambi, Labour Minister Mildred Oliphant and then finance minister Pravin Gordhan.

However, Muthambi, Gordhan and Oliphant were not at the meeting. Attendees were committee secretary, a Ms. Kellerman, Herbert Mkhize whom Zwane said represented Oliphant and two others purportedly representing Gordhan and Muthambi, but were never introduced or named at the meeting.

''I was assured by minister Zwane that the minister of finance [Gordhan] was aware of the meeting, but I found it odd that the finance minister was not there ... although Ms. Kellerman had stated that the committee would be appropriately represented," said Brown.

"I expected that the IMC would have, within its mandate a quorum as it is in any other meeting. I expected the minister of finance to be present given his overarching oversight over the banking sector.''

Brown told the state capture inquiry, chaired by Deputy Chief Justice Raymond Zondo, that he then asked his secretary to get the full names of those who attended the IMC. 

Kellerman responded in writing saying that those present were Muthambi and her adviser Mzwanele Manyi, minister Oliphant and her adviser and Zwane and his adviser.

However, Brown told the commission that: ''Kellerman's response was untrue, Muthambi, Manyi and Oliphant did not attend.''

Nedbank investigated and closed the Gupta accounts belonging to holding company Oakbay Investments, Islandsite, Confident Concept, Sahara Computers and VR Lazer. 

Brown testified that keeping the accounts posed an associated risk, more so after KPMG terminated its relationship with the Guptas.

''In terms of the process we followed, we constituted a committee - properly represented and including myself, head of banking risk, legal, business banking and other frontline business heads - to review the relationship with the Gupta family," said Brown.

"The committee met on April 6, and around that time there were also media reports of FNB and Absa having terminated accounts. We concluded at that meeting that reputation damage to Nedbank would be too great ... and in addition to that, we also had contractual right to terminate banking relationship.''

Nedbank gave the Gupta companies a notice period of 30 days on intention to close accounts.

Former Oakbay CEO Nazeem Howa met with the bank in the interim period, urging them to reverse their decision.

Similar to the testimony from the other banks, Brown said the bank was also called to a meeting with ANC bigwigs at Luthuli House on April 20.

Then secretary general Gwede Mantashe, his deputy Jessie Duarte and Enoch Godongwana attended.

The ANC leaders said they wanted to get a ''better understanding'' as to why banks closed bank accounts, the impact on the investment confidence and that banks ''colluded'' and closed the accounts.

Brown said he explained the broad framework of the FICA, other regulations and the role of banks in the general public.

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