Gupta Associate to Ask S. African Court for Ruling on Bank BidBy and
Application filed to force authorities to decide on permission
Vardospan seeking to buy stake in Habib bank’s local unit
A South African holding company part owned by a businessman linked to the Gupta family’s Oakbay Investments Ltd. is applying for a court ruling to force authorities to decide on whether to grant it permission to buy the local unit of Habib Overseas Bank Ltd.
The application by closely held Vardospan Ltd. to the high court in Pretoria seeks to force the South African Reserve Bank, the Registrar of Banks and Finance Minister Pravin Gordhan to make a decision by Friday on whether to allow the purchase, according to papers filed to the court. That’s because the purchase of the majority stake in the Habib unit is conditional on permission being obtained by the end of the week.
Vardospan is a joint venture between companies owned by Hamza Farooqui and Salim Essa. The latter is a director of VR Laser Services, part owned by Oakbay. The Guptas, who are friends with President Jacob Zuma and in business with his son, had corporate accounts closed by South Africa’s biggest lenders last year.
“It is not just and equitable for the sale to be scuppered” by the respondents’ failure to make a decision, Farooqui said in a founding affidavit that was lodged with the court papers. “Despite the lapse of almost seven months the applications have not been determined.”
The central bank recommended rejecting the Vardospan offer to buy the Habib unit because of concerns about the source of the two businessmen’s income and tax declarations, government officials with knowledge of the matter said last month. Vardospan agreed in August to buy the Habib unit, which has about 1.1 billion rand in South African assets, from Luxembourg-based Pitcairns Finance SA.
The Gupta family has alleged that lenders including Standard Bank Group Ltd., Barclays Africa Group Ltd., FirstRand Ltd. and Nedbank Group Ltd., colluded when they decided to close their accounts. The banks deny the accusation.