* Gordhan, at odds with Zuma, seeks court ruling on Guptas
* Affidavit lists Gupta transactions that raised suspicion
* Zuma and Guptas have denied undue influence on politics
* Official report on Gupta influence blocked from
By Ed Stoddard
JOHANNESBURG, Oct 16 South African Finance
Minister Pravin Gordhan has revealed in a court affidavit
distributed by the Treasury on Sunday that 6.8 billion rand
($490 million) in payments made by wealthy brothers Ajay, Atul
and Rajesh Gupta, companies they control, and other individuals
with the same surname have been reported to authorities as
suspicious since 2012.
The three Indian-born businessmen are the subject of an
official investigation into allegations that they have had undue
influence over President Jacob Zuma. The payments in question,
whose destinations were not disclosed in the document provided
by Gordhan, were ascribed to the three brothers, their nephew
Varun Gupta, numerous companies that they control as well as
other individuals named as Chetali Gupta, Shivani Gupta and Arti
Gupta. Reuters could not establish whether all these individuals
were members of the same family.
Gordhan's court submission caps a week of high drama in
which he was charged with fraud by approving early retirement
for a deputy commissioner in 2010 while Gordhan was head of the
tax agency and re-hiring him as a consultant - a charge that
Gordhan said was politically motivated.
Gordhan has for months been at odds with Zuma, not least
over the alleged political influence of the Gupta brothers, but
is looked to by edgy financial markets as a guarantor of
Gordhan's submission, dated Oct. 13, is a request to the
High Court in Pretoria for a declaratory judgment that he cannot
interfere with decisions by South Africa's major banks to cut
their ties with businesses owned by the Gupta brothers.
Gordhan's submission had the effect of airing what he
considered to be evidence supporting his concerns about the
Gupta brothers' political influence.
The Gupta brothers are close to Zuma and the subject of a
just-finished report by the outgoing Public Protector, a
constitutionally-mandated anti-graft official, into allegations
that they influenced the appointment of ministers. It was
prevented from being made public on Friday by Zuma's application
to the High Court to delay its release.
Zuma has denied granting undue influence to the brothers and
they have denied seeking it. Nevertheless, they said in August
that they planned to exit all of their South African
Several banks and companies have cut ties this year with the
Gupta brothers' investment vehicle, Oakbay Investments, without
publicly disclosing their reasons. They included South Africa's
top four banks: Standard Bank, Nedbank,
Barclays Africa's Absa and First National Bank (FNB),
part of FirstRand.
REQUEST TO INTERVENE
Gordhan says in his 96-page submission to the court that
Oakbay "demanded that on behalf of the government I intervene
with the banks to achieve a reversal of their decision".
Gordhan supported his assertion by attaching correspondence
between himself and Nazeem Howa, the chief executive of Oakbay
Investments, although the letters viewed by Reuters did not
appear to provide evidence of undue pressure.
Neither Howa nor the Treasury responded to requests for
comment by phone and email, and an Oakbay spokesperson said the
firm would not comment on the issue.
A lawyer representing the Gupta family did not respond to an
email seeking comment. However, on Sunday the Oakbay-controlled
ANN7 television news network cited unnamed Oakbay sources as
rejecting allegations of wrongdoing.
In one of the attached letters, Howa said that 7,500 jobs
were at risk as the company could not function without the
support of local banks.
"Given your strong relationship with the captains of
industry, I implore you help us save the jobs ... I look forward
to hearing from you about any possible assistance you are able
to offer," Howa wrote in the letter, dated April 17, 2016.
In another letter, dated May 24, Howa said "we seem to have
no options open to us other than our appeal to you for
Gordhan also included in his affidavit advice from his
lawyers stating that no minister, nor the cabinet as a whole,
had "any power to intervene in the banker-client relationship".
The affidavit includes a report from the Financial
Intelligence Centre (FIC), a government anti-money-laundering
agency, listing 52 payments worth a total of 6.8 billion rand
that were reported to the FIC between 2012 and 2016, presumably
by the banks entrusted with them. It also included 20 cases of
"multiple transactions" with no amounts specified.
The FIC requires banks to notify it of transactions that
appear potentially improper. It says the transactions were
"reported or sent to the centre in terms of Section 29" of the
FIC Act, which deals with transactions regarded as "suspicious
"SERIOUS STATE OF AFFAIRS"
Gordhan's affidavit says that the FIC report "reflects the
increasingly serious state of affairs which has arisen", adding:
"This is illustrated by the number and scale of reported
transactions linked to Oakbay."
The FIC report did not say why the transactions were
regarded as suspicious and did not disclose who reported them or
to whom they were directed. Nor did it say whether any had
eventually been found to be improper. Reuters was unable to
independently confirm any details about the transactions.
A spokesman for Standard Bank said on Saturday that the bank
could not comment and the three other major banks did not
respond to requests for comment. The FIC also did not respond to
a request for comment.
Although the Gupta brothers' relationship with Zuma has been
a source of controversy for years, it burst into the open in
March when Deputy Finance Minister Mcebisi Jonas said in a
statement that he had been offered his previous boss's job as
finance minister by unnamed members of the Gupta family.
Gordhan, who had been finance minister from 2009 to 2014,
was put back in the job in December after Zuma sacked Nhlanhla
Nene and replaced him with the little-known backbencher Des van
Rooyen, triggering a crash in the rand currency and sending
banking shares sharply lower.
The Gupta family issued an emphatic denial of Jonas's
allegation at the time.
Zuma told parliament in March that he was not the right man
to question on the allegations.
"If Jonas says he was offered by the Guptas, I think you
will be well-placed to ask the Guptas, or Jonas. Don't ask me.
Where do I come in?" he said. "I never offered Jonas the
ministry. That's why he is the deputy minister."
($1 = 13.8542 rand)
(Reporting by Ed Stoddard and Ed Cropley; Editing by Kevin