Legalbrief | your legal news hub Thursday 23 September 2021

Zwane fingered as Gupta champion

While the ANC’s reputation took a hammering at Judge Raymond Zondo's state capture inquiry this week, former Mineral Resources Minister Mosebenzi Zwane has been identified as a Gupta cheerleader, writes Legalbrief. The testimony of four of SA’s major banks unmasked Zwane as the key champion fighting against a decision to close the Gupta family’s bank accounts, according to a Times Select report. It says testimony by senior banking officials at the Zondo commission of inquiry this week lifted the lid on how Zwane, during meetings with Standard Bank, Absa, First National Bank and Nedbank, threatened to take away the banks’ operating licences and in one instance pleaded with officials to ‘step in and save jobs’. The damning testimony by banks started on Monday, but according to the commission, Zwane has yet to apply to cross-examine the bank officials. Commission rules say Zwane has two weeks from the time he is implicated during witness testimony to apply to cross-examine those witnesses. Inquiry lawyer Kate Hoffman confirmed yesterday (Wednesday) that, as yet, no application has been forthcoming. Zwane reportedly told Times Select he did not want to comment on evidence against him ‘at this stage’. ‘Let me keep my view to myself for now ... I’ve made enough news.’ He also declined to comment on whether he'd seek to cross-examine any of the bank witnesses. The report notes that while Zwane – a Minister in former President Jacob Zuma’s Cabinet who travelled to Zurich around the time the Guptas were there to negotiate the sale of the Optimum mine – is still mulling his options, former Public Enterprises Minister Lynne Brown will apply today (Thursday) for the right to cross-examine former Deputy Minister Mcebisi Jonas on aspects of his evidence to the inquiry.

Nedbank yesterday became the fourth bank to tell the inquiry about attempts by government and the ANC to intervene on behalf of the Guptas after their accounts were closed in 2016, notes Legalbrief. This time the connection was made by Nedbank’s CEO‚ Michael Brown‚ who told the Zondo inquiry that Zwane urged Nedbank to ‘step in and save jobs’ by reopening closed Gupta company accounts, stressing that Gupta family members had stepped down from these companies. According to a TimesLIVE report, Brown said Zwane went on to ‘suggest that would Nedbank consider stepping in to save jobs and provide an amicable solution‚ given that the relevant family … had resigned from those companies’. ‘I found it (the request) particularly strange. I reminded Mr Zwane that we were not here to discuss particular client matters. Our decision for closing the accounts was based on the reputational and business risk associated with those accounts and that ... would not have materially changed at all as a consequence of resignation of directors.’ Brown added that Zwane later commented that ‘he found it surprising that other banks had refused to attend the inter-ministerial committee (IMC) meeting of government considering that banks received their licences from government’. Brown saw that as a veiled threat, noting ‘it was also technically inaccurate ... because banks do not receive their licences from government. They receive their licences from the Reserve Bank‚ which is constitutionally an independent body.’ He added: ‘I left the meeting with the impression that the IMC was focused on two key issues: to try and determine if there was collusion among the banks in the closure of bank accounts and‚ secondly‚ to determine whether Nedbank would have the appetite to step in and become the primary transactional banker for the Gupta group of companies.’

Senior Nedbank officials had two meetings with ANC leaders – one to discuss the closure of Gupta-linked bank accounts‚ and another to deal with the ‘national discourse on nationalisation of mines’, according to a SowetanLIVE report. Brown told the inquiry that in 2016‚ the bank noticed escalating negative media reports on the Guptas. Among these was the statement made by Jonas that a Gupta brother had offered him a job to replace then Finance Minister Nhlanhla Nene. Brown‚ who has been at the helm of Nedbank since 2010‚ said the allegations against the Guptas continued to raise business and reputation risks for the bank. The risks surged when the bank learned that audit and advisory firm KPMG and sponsoring broker Sasfin had terminated their relationships with Gupta companies. ‘We thought there must have been a reason for this to happen… They would have had access to more information than we had at that stage‚’ said Brown. This led to the formation of a sub-committee to investigate the matter and it was decided to terminate its relationship with Gupta businesses on 7 April 2016. Brown testified that the meeting at Luthuli House was attended by then secretary-general Gwede Mantashe and his deputy Jessie Duarte. The meeting was facilitated by Enoch Godongwana and took place on 20 April 2016. Brown said it was not the first time he had attended a meeting at the ruling party’s head office, noting: ‘I have attended meetings‚ for example‚ when there was national discourse on nationalisation of mines.’ At the end of the meeting‚ Brown said he did not feel that he was being persuaded to change the bank’s decision to close bank accounts but felt that he had been given an opportunity to provide information to the ruling party. The ANC was again in the state capture dock on Tuesday, when both First National Bank (FNB) and Absa told the Zondo inquiry they had rejected attempts by the IMC to intervene on behalf of the Guptas after the big four banks shut down their accounts, notes Legalbrief. FNB also turned down an invitation to attend a meeting on the matter with the ANC at Luthuli House. Unlike Standard Bank, notes News24, FNB strongly pushed back on both requests, leading to the cancellation of the ANC meeting. Former First Rand CEO Johan Burger was testifying at the inquiry, which is investigating allegations of undue influence by the politically-connected Gupta family on Zuma's administration. ‘In my 32 years in banking it was first time I ever received a request from (a) party or IMC to want to discuss a bank-client relationship. That was unexpected. I didn't expect a third party to question that relationship,’ Burger said. He said both the ANC and IMC wanted to discuss the closure of the Gupta accounts following media reports.

The ANC can no longer wash its hands of state capture. It is now implicated in aiding the Guptas, despite evidence of criminal activity being perpetrated and its electoral mandate being usurped, notes a Times Select report. It says the party can no longer claim it is not on trial and that state capture was perpetrated by some members who went rogue on the organisation. It also cannot continue to quietly blame its former president, Jacob Zuma, for collusion with the Gupta family. Two of its current top officials as well as three serving members of the national executive committee (NEC) have been implicated in trying to bully a major SA bank to reopen the Guptas’ bank accounts in 2016. The report notes that the account of Standard Bank’s former head of compliance, Ian Sinton, was the first evidence presented to the commission that the ANC as a political party interceded on behalf of the Guptas. It further compromises the ANC that their line of questioning regarding white monopoly capital is straight from the Bell Pottinger script to attack the Guptas’ opponents, according to the report.

The ANC’s meddling with the banks on behalf of the Guptas is also taken up in a Daily Maverick report in which former editor Ferial Haffajee notes that testimony by the banks this week has besmirched the ANC’s legacy as a party of the rule of law. Haffajee writes: ‘There is something insouciant and casually careless about Godongwana messaging Burger to set up a meeting to inquire why the bank had been one of four which revoked bank accounts of the Gupta family and related entities.’ She notes that as several banking executives said at the commission this week, the ANC’s decision to step in was a step-change in banking regulation and a highly risky one.