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Gupta-linked companies application against Baroda dismissed with costs

A man walks past the Bank of Baroda headquarters in Mumbai, India, May 3, 2016.
A man walks past the Bank of Baroda headquarters in Mumbai, India, May 3, 2016.
Image: REUTERS/Danish Siddiqui

The urgent application by 20 Gupta-linked companies to prevent the Bank of Baroda of cutting its ties with them has been dismissed with costs.

Judge Ntendeya Mavundla read only one paragraph of the order on Monday morning in the High Court in Pretoria to say the application has been dismissed with costs.

The application started out on behalf of 20 Gupta-linked companies‚ but was reduced to 19. On March 1 it was reduced to 13‚ because six of the applicants are in business rescue.

Nedbank informed Baroda at the end of January that it would be cutting ties with the bank within three months. Baroda in turn said it would not accept any deposits into Baroda accounts from March 1‚ because it wanted to wind down its affairs before the end of its agreement with Nedbank.

Baroda has a correspondent banking relationship with Nedbank in South Africa. This means Baroda relies on Nedbank to clear its transactions and service its customers.

Its customers include Gupta-linked companies Sahara Computers‚ VR Laser‚ Koornfontein Mines‚ Oakbay Investments‚ Oakbay Resources & Energy‚ Optimum Coal Mines‚ Shiva Uranium and Tegeta.

Baroda informed the Gupta-linked companies on July 6 last year that it was ending its relationship with them. The Gupta-linked companies were suspected of artificially creating the urgency of their application by not finding another bank and relying on a judgment that Judge Tati Makgoka had delivered in October last year.

This is a developing story.

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