The Organisation Undoing Tax Abuse (Outa) will take the India-based Bank of Baroda (BoB) to court to ensure the rehabilitation trust accounts of the Gupta-owned Optimum and Koornfontein coal mines, worth R1.75 billion, are frozen.
The move follows a ruling by the High Court in Pretoria yesterday allowing BoB to close the bank accounts of 20 companies in the Gupta group. They tried to stop the closure of their bank accounts pending further legal action, but the court would not allow it.
Outa said its application had been filed with the court and it expected it to be heard within the next few days.
The organisation said BoB was believed to have been the last bank in SA that had maintained accounts for the Guptas after others distanced themselves from their alleged illegal activities.
Outa’s chief operating officer Ben Theron said the organisation wanted to stop the mines’ funds from disappearing.
“We want to ensure that this money doesn’t leave the country or find its way into the Gupta family’s pockets. We believe these trust funds represent more than 90% of the deposits held by the bank in SA.”
Outa has appealed to Mineral Resources Minister Mosebenzi Zwane and the South African Reserve Bank to secure the funds, but said it received no response.
Julius Kleynhans, OUTA’s Portfolio Manager for Water and Environment, said the funds were meant to rehabilitate environmental damage in and around the collieries.
“The purpose of a rehabilitation trust is to ensure that the area is rehabilitated and restored to such an extent that it is useful and safe for future generations to use.
The Mineral and Petroleum Resources Development Act and the National Environmental Management Act dictate that the funds in mine rehabilitation trusts cannot be used for purposes other than managing the environmental damage caused by mining activities.
“We started to close the taps on the Guptas’ finances in July 2017 by taking action against their banks. Recent actions by the Bank of Baroda seem to indicate that they are serious about continuing to do business in South Africa, but if it’s serious about cleaning up shop, we trust that it will not attempt to oppose our interdict,” Theron said.
OUTA said its investigations revealed that the Guptas had bought properties for a total of R245 million over more than a decade and paid over R50 million in cash, but managed to get bonds on these properties totaling nearly R1 billion – an amount that far exceeded the value of the properties.
The organisation alleged that the BoB provided the family with bonds of R811 million, the Bank of India R176 million and the remaining R11 million coming from FirstRand.