By SABELO SKITI, THANDUXOLO JIKA and STEPHAN HOFSTATTER
The Department of Mineral Resources withheld information twice about the movement out of the country of hundreds of millions of rands involved in a Gupta-owned mine.
DMR spokesman Ayanda Shezi in July dismissed two separate media enquiries into the status of a R1.5-billion trust account for the rehabilitation of Gupta-owned Optimum Coal Mine (OCM), as well as whether the funds were safe, several weeks after the department had approved a transfer of the trust and money in it from Standard Bank to the Bank of Baroda in India.
A letter contained in court papers filed by Finance Minister Pravin Gordhan reveals that the department (DMR) had already approved the transfer at least three weeks earlier.
The DMR decision would have been made by Minerals Minister Mosebenzi Zwane, who has been accused of doing favours for the Gupta family.
The letter, from Werksmans Attorneys, acting on behalf of OCM’s joint business rescue practitioners Peter Van Steen and Piers Marsden, to the South African Reserve Bank on June 27, highlighted that DMR had approved the transfer on condition the bank was registered in South Africa.
The bank, which has two branches in the country, is registered under “branches of foreign banks” with the Reserve Bank.
Shezi’s denial, in light of the developments, raises critical questions about whether due process was followed in granting the approval for the transfer of the trust to a foreign bank, as well as whether the approval did not leave the country exposed.
The Guptas have gained notoriety for exploiting their closeness to President Jacob Zuma to gain leverage over government processes and have also been accused of having a hand in the appointment of ministers, a phenomenon referred to as state capture. Zuma has maintained that his friends have no influence over him.
Gordhan felt sufficiently concerned about the approval to raise it in his court affidavit.
“If those funds from the trust were to be spent on anything other than genuine mining rehabilitation, it will expose the fiscus not only to loss of revenue and also put the burden of mining rehabilitation on the fiscus,” he said.
The trust is one of several Gupta-linked entities flagged by the banks for suspicious transactions totaling R 6.8-billion, Gordhan said in his affidavit. This transaction of R1.3-billion, said Gordhan, could be the transfer of the trust.
DA shadow minister of finance David Maynier called for the Hawks to investigate the transactions.
“The Minister of Finance, Pravin Gordhan, has pushed the “red button” and escalated the dirty war between himself and President Jacob Zuma’s most important clients, the Guptas,” he said of the court action.
Yesterday, Shezi said the department did not have enough time to respond to follow-up questions seeking clarity, but a response should be provided by today.
However, two independent sources close to the transaction confirmed to the Sunday Times in mid-July that the trust had indeed been transferred to the bank.
One said there was R 1.75-billion in the rehabilitation account in July, R250-million left without anyone knowing, and then R1.5-billion was transferred to the Bank of Baroda.
“That must have been settling the bridging finance that B of B gave the Guptas to buy the mine,” the source said.
Ironically, large tranches of the R2.2-billion the Gupta family paid for Optimum in April came from the Bank of Baroda.
This is not the first time Zwane’s actions in matters related to the Guptas have attracted attention.
Last month, he issued a cabinet statement calling for a judicial inquiry into the banks for closing the Guptas accounts, and he was censured by opposition parties in parliament. Cabinet and the Presidency later distanced themselves from his statement.
Zwane was also fingered as having pressured Glencore into agreeing to sell OCM to Gupta-owned Tegeta Resources and Exploration.
Movement of millions withheld
The Department of Mineral Resources withheld information twice about the movement out of the country of hundreds of millions of rands involved in a Gupta-owned mine.
DMR spokesman Ayanda Shezi in July dismissed two separate media enquiries into the status of a R1.5-billion trust account for the rehabilitation of Gupta-owned Optimum Coal Mine (OCM), as well as whether the funds were safe, several weeks after the department had approved a transfer of the trust and money in it from Standard Bank to the Bank of Baroda in India.
A letter contained in court papers filed by Finance Minister Pravin Gordhan reveals that the department (DMR) had already approved the transfer at least three weeks earlier.
The DMR decision would have been made by Minerals Minister Mosebenzi Zwane, who has been accused of doing favours for the Gupta family.
The letter, from Werksmans Attorneys, acting on behalf of OCM’s joint business rescue practitioners Peter Van Steen and Piers Marsden, to the South African Reserve Bank on June 27, highlighted that DMR had approved the transfer on condition the bank was registered in South Africa.
The bank, which has two branches in the country, is registered under “branches of foreign banks” with the Reserve Bank.
Shezi’s denial, in light of the developments, raises critical questions about whether due process was followed in granting the approval for the transfer of the trust to a foreign bank, as well as whether the approval did not leave the country exposed.
The Guptas have gained notoriety for exploiting their closeness to President Jacob Zuma to gain leverage over government processes and have also been accused of having a hand in the appointment of ministers, a phenomenon referred to as state capture. Zuma has maintained that his friends have no influence over him.
Gordhan felt sufficiently concerned about the approval to raise it in his court affidavit.
“If those funds from the trust were to be spent on anything other than genuine mining rehabilitation, it will expose the fiscus not only to loss of revenue and also put the burden of mining rehabilitation on the fiscus,” he said.
The trust is one of several Gupta-linked entities flagged by the banks for suspicious transactions totaling R 6.8-billion, Gordhan said in his affidavit. This transaction of R1.3-billion, said Gordhan, could be the transfer of the trust.
DA shadow minister of finance David Maynier called for the Hawks to investigate the transactions.
“The Minister of Finance, Pravin Gordhan, has pushed the “red button” and escalated the dirty war between himself and President Jacob Zuma’s most important clients, the Guptas,” he said of the court action.
Yesterday, Shezi said the department did not have enough time to respond to follow-up questions seeking clarity, but a response should be provided by today.
However, two independent sources close to the transaction confirmed to the Sunday Times in mid-July that the trust had indeed been transferred to the bank.
One said there was R 1.75-billion in the rehabilitation account in July, R250-million left without anyone knowing, and then R1.5-billion was transferred to the Bank of Baroda.
“That must have been settling the bridging finance that B of B gave the Guptas to buy the mine,” the source said.
Ironically, large tranches of the R2.2-billion the Gupta family paid for Optimum in April came from the Bank of Baroda.
This is not the first time Zwane’s actions in matters related to the Guptas have attracted attention.
Last month, he issued a cabinet statement calling for a judicial inquiry into the banks for closing the Guptas accounts, and he was censured by opposition parties in parliament. Cabinet and the Presidency later distanced themselves from his statement.
Zwane was also fingered as having pressured Glencore into agreeing to sell OCM to Gupta-owned Tegeta Resources and Exploration.
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