Gupta Case Against Bank Of Baroda Dismissed With Costs

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.
Danish Siddiqui / Reuters

The High Court in Pretoria on Monday dismissed the application of Gupta-linked companies against Bank of Baroda with costs.

Judge Ntendeya Mavundla ruled on an urgent application by 19 Gupta-linked companies to prevent the Bank of Baroda from closing its South African operations.

In his ruling Mavundla said "the bank's right to or not to trade supersedes whatever right, if any, the applicants might have".

The Bank of Baroda confirmed last month it was leaving South Africa, with the South Africa Reserve Bank saying it would ensure an "orderly" withdrawal.

"The Bank of Baroda has notified the Office of the Registrar of Banks of its exit from South Africa. The Registrar‚ which is part of the South African Reserve Bank (SARB)‚ is in discussions with the Bank of Baroda to ensure its orderly withdrawal from South Africa so that no depositor is disadvantaged," the SARB said last month.

In the North Gauteng High Court last month, the Bank of Baroda said the Gupta-owned companies couldn't force it to stay in South Africa.

Danish Siddiqui / Reuters

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 was entitled to cease contractual business, and there can be no contractual right to keep providing services to another business if it becomes uneconomical.

Shailesh Andrade / Reuters

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.

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