The scandal-hit Bank of Baroda has been facing heat over its connection with India-born Gupta family who have been accused of “state capture” in South Africa.
Judge Ntendeya Mavundla of Pretoria High Court on March 12 dismissed an application by 20 Gupta-linked companies, which moved the court to stop the bank from closing its accounts and moving out of the country. The bank had decided last month to move out of South Africa citing strategic decision to cut down its international market. Bank of Baroda was reportedly the only one that did not close the Gupta family’s accounts and continued working with them even after many South African banks closed the family’s accounts. Leading South African banks turned their back to the Gupta family after allegations of corruption against the brothers came to light through a South African anti-graft watchdog.
Jayakumar defended the move in the interview, saying: “Bank of Baroda could actually not close the accounts as a loan taken by the Gupta companies was still outstanding and there were deposits that couldn’t be pre-terminated.”
Mavundla, in his judgement, stated that the courts could not interfere with the bank’s decision to leave the country. He said: “The respondent’s rights to trade or not to trade supersedes whatever right if any the applicants might have. I further conclude that the balance of convenience far outweighs that of the applicant’s and tilts in favor of Bank of Baroda.”
He added: “Put differently, the courts cannot compel the respondent to keep the doors of its business open for whatever duration.”
The Gupta-linked companies had secured an interim order against the bank last year after the latter said it would be closing all accounts. The application made by the companies quoted difficulties they would have with closure of salary payment of thousands of employees in their businesses, which range from information technology to mining.
In the latest judgement, the court said that the bank has “every right to” terminate the business contracts, including those of the 20 Gupta-linked companies. No representative from the Gupta companies or the Bank of Baroda has commented on the ruling so far.
The Gupta family came to South Africa two decades ago from a small town in Uttar Pradesh, and has established a massive business empire that is facing accusations of corruption and influence peddling due to their closeness with former president Jacob Zuma.
The three brothers, whose whereabouts are unknown, along with their private jet, are being sought by authorities. Ajay Gupta has been declared a fugitive. The authorities are also on the lookout for Duduzane Zuma, son of former president Jacob Zuma who stepped down from his post on Feb. 14 under pressure from the ruling party.