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In 2016, a meeting was held between top ANC officials and Standard Bank representatives at Luthuli House, following the announcement by Standard Bank that it would be closing Gupta-linked bank accounts. In attendance was ANC secretary-general Gwede Mantashe‚ deputy secretary-general Jessie Duarte and economic subcommittee chairperson Enoch Godongwana.
This was revealed by head of compliance for Standard Bank, Ian Sinton, who on Monday was testifying at the commission of inquiry into state capture. This meeting, Sinton said, was an attempt to get the bank to halt its decision to close the accounts.
Led by advocate Phillip Mokoena, Sinton was asked what internal processes were followed by the bank to have reached the decision to terminate the Gupta accounts, of which the Guptas were notified in April 2016. The bank had given the Guptas two months’ notice.
Sinton said that the bank was summonsed to Luthuli House to answer to the ANC as to why the bank had taken the decision to terminate the accounts.
“We were willing to explain our policies and procedures around account-closing generally‚” Sinton said, adding that they had emphasised not discussing client affairs with them.
At the meeting, Standard Bank was accused of oppressing black business by being a part of “white monopoly capital”, which the bank vehemently denied.
Shortly after the meeting, an inter-ministerial committee was set up. It was chaired by Minister of Mineral Resources Mozebenzi Zwane, and its advisers were Minister of Labour Mildred Oliphant and Mzwanele Manyi (former government spin doctor turned media owner – he took over the Gupta TV station ANN7 and newspaper The New Age. Both have since shut shop). The bank was asked to meet with the committee.
In scathing testimony, Sinton said that the committee had said in no uncertain terms that it had the power to influence government to change laws relating to the processes that banks had in place to terminate bank accounts at their own discretion.
“The meeting was an attempt by two Cabinet ministers on behalf of Cabinet to persuade us to retract our decision to close the accounts of Gupta-related entities‚” he told the commission.
Sinton said that the bank had a team that constantly monitored the media for adverse reports. If the bank flagged suspicious transactions by its clients, it asked for explanations regarding suspicious transactions and activity.
“The process which we follow generally is that, through external media or internal information, we notice conduct on the part of a customer, which might give rise to a suspicion, that the customer is involved in something unlawful,” Sinton said.
He explained that once enough compelling evidence was gathered, including the monitoring of transactions via certain algorithms, the bank could take the decision to terminate accounts.
“If it’s not very compelling or perhaps ambiguous, we would ask for an explanation by that customer and give the customer an opportunity to persuade us, that the adverse information is unjustified,” he said.
A committee, Sinton said, then made the final decision.
Judge Raymond Zondo, who was heading the inquiry into state capture, asked why Standard Bank would not take the view of asking the client for an explanation, regardless of whether or not the evidence is compelling enough, “because obviously a decision such as that is quite a serious decision for the client”.
Sinton said that if a customer was convicted of a criminal offence, the bank does not deem it necessary to have a discussion with the client. He also added that if the evidence suggested that the banking systems were being used to commit other offences, a decision would be taken.
Mokoena asked Sinton what informed the decision for Standard Bank to close the accounts. Sinton said it was spurred on by Absa Bank terminating its bank accounts that had Gupta links.
“We would obviously accept that Absa Bank is bound by the same laws as we are, so if they saw good reason to terminate, it put us on notice that we should look carefully ourselves as to what legs we had and if we were at risk. And that more or less stimulated the commencement of the gathering of information,” Sinton said.
KPMG soon announced that it was terminating its contract, which also raised a red flag for Standard Bank.
Sinton said that it was revealed that then deputy finance minster Mcebisi Jonas was offered a ministerial position in return for benefits. The bank also viewed that in a serious light, especially after it was published on the National Treasury website, “as an official publication by government”, Sinton said.
Former ANC MP Vytjie Mentor’s admission that the Gupta’s had offered her a role in Cabinet “in exchange for favours” also raised an alarm.
Sinton also quoted a 2016 City Press article, when an Oakbay executive had “assisted a wife of the president to purchase a house” by obtaining a bond from the Bank of Baroda, to the value exceeding R3 million.
Read: First Lady’s house backed by Guptas
On Tuesday, the commission will continue with representatives from Absa Bank appearing. The commission is set to begin at 11.30am.
