OUTA wins freeze on Gupta mine rehab funds at Bank of Baroda
The Organisation Undoing Tax Abuse (OUTA) today (Tuesday 26 September 2017) won an urgent interim interdict in the Pretoria High Court against the Bank of Baroda, freezing R1.75 billion in the Gupta-owned Optimum and Koornfontein coal mines’ rehabilitation trust fund accounts.
“This is another sweet victory for South Africa, with the prevention of Gupta mining trust accounts worth at least R1.75 billion from leaving our shores or being plundered by the Guptas,” says Ben Theron, OUTA’s Chief Operating Officer. “But the fight is far from over as we want to ensure that the Gupta family and those responsible for state capture are held accountable.”
According to the Mineral and Petroleum Resources Development Act and the National Environmental Management Act, mine rehabilitation funds cannot be used for purposes other than managing the environmental damage caused by mining activities. These funds must be used to restore and rehabilitate the damaged area when the mine gets to the end of its life.
“The trustees of the Gupta-linked mining rehabilitation funds allegedly mismanaged the funds, allowing the controversial family to use the trusts to pay back loans. Pending the final outcome of the interdict, we will pursue these individuals and hold them accountable for their misconduct,” says Theron.
The interim order directs the Bank of Baroda to continue to hold the trust funds of the Optimum Mine Rehabilitation Trust and the Koornfontein Mine Rehabilitation Trust in interest-bearing accounts in the trusts' names. The trustees or those with signing powers are interdicted "from directly or indirectly dealing in any way with, disposing of or removing from the Republic of South Africa any of the funds or assets of the Trust including but not limited to the Trust's funds held in any account of or at the Bank of Baroda".
The matter was postponed to 7 December.
OUTA recently appealed to Minister of Mineral Resources Mosebenzi Zwane and the South African Reserve Bank to secure these funds, with no response.
The application was brought in the Pretoria High Court on 21 September just hours after the Guptas lost an urgent application to interdict the Bank of Baroda from closing their bank accounts.
In July 2017, OUTA proved that businesses linked to the Guptas bought properties over more than a decade for a total of R245 million – more than R50 million of which was paid in cash – but managed to get bonds on these properties totalling nearly R1 billion, an amount that far exceeded the value of the properties. The Bank of Baroda provided bonds valued at R811 million and the Bank of India provided bonds of R176 million; the remaining R11 million came from FirstRand. The transactions linked to the Bank of Baroda and the Bank of India were particularly problematic.
OUTA's application papers are online: part 1, part 2 and part 3.
The interim order is available here.