STATE CAPTURE INQUIRY: Banks summoned by ANC to explain decision to close Gupta account
Standard Bank's head of compliance Ian Sinton says one of the banking group's chief executives was summoned to Luthuli House to explain the group's decision to terminate Gupta-linked bank accounts.
Testifying at the commission of inquiry into state capture on Monday, Sinton said the bank thought it would be “disrespectful” to decline an invitation from the ANC. “We have a policy which we apply both in South Africa and all our jurisdictions that we constructively engage with all relevant stakeholders and government," said Sinton.
"We also at the time discussed the invitation and our view was that it was the governing party of the day and it would be disrespectful to decline.”
Sinton said Oakbay CEO Nazeem Howa told him that he had asked members of the ANC to intervene on the company’s behalf after serval Gupta-linked bank accounts were closed due to suspicious transactions.
The invitation came after the bank terminated the accounts of Gupta-linked accounts in 2016.
Asked why the bank chose to close the accounts, Sinton said if Standard Bank finds compelling information of criminal activity or wrongdoing from any of its clients, it can take a decision to cut ties without asking for representations or arguments from the client.
The bank based its decision on various media reports on the Gupta family’s involvement on state capture and followed suit from Absa and KPMG who had already terminated ties.
Banks are regulated by the Banks Act, the Financial Intelligence Centre Act and the Prevention of Organised Crime Act which deals with issues of money laundering. “We are obliged to ensure that our banking systems are not used to facilitate corrupt payments, to ensure that we don’t become accessories of corruption.
"If the court finds that a reasonable bank should have been suspicious of the transaction but still went ahead and approved the transaction… that is considered an offence," said Sinton, adding that failure to comply with statutes as a bank would put the group and its employees at a high risk.
He explained: "Most of the countries where we have correspondent relationships, there are similar laws as those that apply in South Africa. While we in South Africa are very careful about who we do business with in the form of international banks, that it does not expose us to the contravention of our own laws, they in turn as international banks constantly monitor us to ensure that we don’t expose them to corruption, money laundering and financing of terror.”
The commission is looking at whether officials and government ministers intervened in the shutting down of the Gupta accounts.
In 2016, the country's big four commercial banks decided to close Gupta-owned bank accounts after they detected several suspicious transactions.
Standard Bank’s Ian Sinton became the first bank official to take the stand in the state capture commission of inquiry on September 17 2018. Journalist Karyn Maughan gives us the highlights of his testimony.