#StateCaptureInquiry: Absa also refused to meet with Cabinet ministers over Gupta accounts
19 September 2018
Absa has told the commission of inquiry into state capture that the bank was "deeply concerned" that members of the executive were interfering in the closure of Gupta-linked bank accounts, despite this posing a risk to the bank and South Africa's economy.
Absa's Yasmin Masithela, who was head of compliance at the time, told the inquiry that the bank's executives were twice summoned to a meeting with Cabinet ministers to discuss the bank's decision to close the accounts. She said on both occasions Absa refused to attend. However, bank executives did attend a meeting with the ANC, but refused to discuss the Gupta accounts.
The bank was one of four to be summoned by the inter-ministerial committee set up by former president Jacob Zuma's Cabinet to investigate the banks' decision to close Gupta-linked accounts. The committee was headed by then mineral resources minister Mosebenzi Zwane. Earlier on Tuesday FNB told the inquiry it refused to attend the meeting. Standard Bank confirmed on Monday that it had met with the inter-ministerial committee but refused to discuss the Gupta accounts.
Absa was the third bank to testify at the inquiry headed by Deputy Chief Justice Raymond Zondo after Standard Bank and FNB. Nedbank will give evidence on Wednesday. Absa was the first bank to close the Gupta's accounts, however, it was criticised for only doing so 15 months after it had given the notice.
Masithela told the inquiry that interference by the executive was a risk to Absa's reputation and would have amounted to a deviation of the bank's own risk management processes and a violation of domestic and international regulations that bar the bank from discussing client relationships with third parties.
"It would have exposed us to sanctions as it is clear there is no regulation that allows the executive to interfere," she said.
'Unexplainable transfers'
Masithela said Absa had decided to close the Gupta-owned bank accounts after an internal review committee that also annually reviewed accounts held by politically exposed people saw unexplainable large transfers of money from the accounts. The Guptas were also facing adverse media reports and she said Gupta-owned company Oakbay was no longer using Absa as its primary or dual bank, making it difficult to monitor and understand transactions undertaken.
"There was also evidence of large unexplained transfers of funds between the Oakbay companies and related parties to other banks," Masithela testified.
All four banks faced pressure from the inter-ministerial committee and the ANC to reopen the accounts.
Absa CEO Maria Ramos was also "invited" to a meeting by then ANC secretary general Gwede Mantashe, the commission heard. She, however, made it clear that the bank could not discuss client information, as it was "illegal to do so".
The meeting was held at the party's headquarters in Johannesburg and was attended by Mantashe, deputy secretary general Jessie Duarte, head of ANC's subcommittee on economic transformation Enoch Godongwana and Krish Naidoo as a legal representative for the party. Masithela said while Mantashe accepted that they could not discuss Absa's relationship with its clients, during the meeting Absa was confronted with allegations of "collusion" between the banks.
"We said we have our own risk management, we don't discuss any client with any third party including any other bank," she said.
She added that Ramos also told Mantashe that allegations of collusion were serious and should be reported to relevant the authorities, such as the Competition Commission.
The commission resumes at 09:30 on Wednesday.
