Bank of Baroda: Guptas can't force us to stay in SA
Pretoria - The Bank of Baroda told the North Gauteng High Court on Thursday that Gupta-owned companies cannot force it to stay in South Africa to service them because no other bank will.
Nineteen Gupta-owned companies, including Optimum Coal Mine, Sahara Computers and Oakbay Investments, approached the high court with an urgent application in February, seeking to interdict the bank from leaving South Africa.
The Guptas’ banking woes started in 2017 when all four of the country’s major banks declined to do business with the controversial family’s companies.
Advocate Azhar Bham for the Bank of Baroda said it decided to withdraw from South Africa as business was no longer economically worthwhile. He said the Bank of India, which is the majority shareholder of the Bank of Baroda, took a decision to withdraw from countries where little business is conducted.
Bham added that a company is entitled to cease contractual business, and there can be no contractual right to keep providing services to another business if it becomes uneconomical.
He likened the application by the Gupta companies to a failing marriage where one party refuses a divorce because of their own interests.
“You cannot force Bank of Baroda against its will and against its economic interests to stay here and service them and only them,” said Bham.
The application wants to force the bank to keep servicing 12 or 13 companies because no other bank will do business with them, he said.
Advocate Arthur Cook, for the Gupta-owned companies, told the court that the bank's withdrawal from the company was a deliberate breach of a court order.
The court order he is referring to is an interim order granted by the same court in 2017 stipulating that the Bank of Baroda may not close the accounts of Gupta-owned companies.
“We submit that the bank took a decision that is a blatant disregard of the court order,” Cook said. “The court order says they cannot stop the services and close accounts.”
Cook argued that closing the bank accounts would not only be in contravention of the court order, but would also have severe negative consequences for employees at the affected companies.
News24 previously reported that it was a Bank of Baroda account that received the money from the infamous Vrede dairy project.
Judge Ntendeya Mavundla reserved his judgment, saying that the fundamental question he must answer is if a court can keep the bank in the country, open and operating against its own will.
Judgment will be delivered on March 12.
* SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.