Zuma's Gupta Associates Haven't Fled South Africa, CEO Says

  • Oakbay CEO Howa criticizes banks' decision to close accounts
  • Zuma is facing mounting pressure to resign as president

Guptas Haven't Fled South Africa, Says Oakbay's Howa

Members of the Gupta family, who’re friends of South African President Jacob Zuma, haven’t fled the country following a wave of controversy surrounding their alleged influence over the nation’s leader, the chief executive officer of their company said.

“They are not hiding,” Nazeem Howa, CEO of Oakbay Investments Ltd., which is entirely owned by the members of the Gupta family, said Monday in an interview with Bloomberg TV in Johannesburg. “They’ve not fled the country.” Rapport newspaper said Sunday the Gupta family had left the country, citing flight data and an unidentified eyewitness at a Johannesburg airport.

Atul Gupta and Varun Gupta resigned their positions at Johannesburg-listed Oakbay Resources and Energy Ltd., which is 80 percent owned by Oakbay Investments, the company said on Friday. The announcement came after financial-services groups including accounting firm KPMG LLP and Barclays Africa Group Ltd.’s Absa unit dropped the company and other Gupta-controlled businesses as clients, as questions about the family’s influence over Zuma mounted. Zuma’s son, Duduzane, who stepped down as a director of the company’s Shiva Uranium unit, said he is planning to divest from the businesses.

Zuma is facing mounting pressure to resign as president following a court ruling over his response to a graft ombudsman report and after allegations by senior officials of the ruling African National Congress that the Guptas offered them cabinet posts in exchange for business concessions. The claims have spurred probes by the party and the Public Protector. Howa said there is no evidence of corruption against the Guptas.

South Africa’s four biggest banks have given Oakbay until the end of May before its accounts are closed, Howa said.

“It’s unprecedented for the four major banks to walk away from an institution,” he said.

No Coordination

Cas Coovadia, head of the Banking Association of South Africa, said the banks didn’t agree among themselves to close Oakbay’s accounts.

“It’s not at all a coordinated effort by the banks, it can’t be. That would be anti-competitive,” he said by phone Monday. “These are individual banking decisions. For a major company, if you don’t have an auditor, then you’re going to have some problems.”

The Gupta family’s businesses span media, computers, mining and engineering. Howa said 7,500 jobs are under threat because the businesses can’t operate without those bank accounts.

While the family is distancing itself from its business, “there’s no indication at this point” that it’s planning to divest, Howa said.

Before it's here, it's on the Bloomberg Terminal.