Govt denies its strong-arming banks over Guptas

Minister Jeff Radebe announced that Cabinet ministers would hold ‘constructive engagement’ with banks.

Minister in the Presidency, Jeff Radebe. Picture: GCIS.

CAPE TOWN - Minister in the Presidency, Jeff Radebe, has dismissed suggestions that government is trying to bully the country's four major banks over their decision to cut ties with the Gupta-linked company, Oakbay Investments.

Radebe announced this afternoon that Cabinet has agreed that the ministers of finance, labour and mineral resources should open a "constructive engagement" with the banks to find a lasting solution to the matter.

He says while Cabinet appreciates the terms and conditions of the banks, it believes the decision to close the company's accounts could deter potential investors wanting to do business in South Africa.

The minister referred the question whether Oakbay Investments asked the government for help to the ministers of finance, labour and mineral resources to the task team that's now been sent in to deal with the company's stand-off with the banks.

He says the ministers are seeking information and that it isn't an investigation.

"Bullying of the banks? I think there are big boys and girls in the banks; they can never be bullied by anyone, so the question of bullying does not arise. It's an interaction".

Minister Radebe did not explain why Mineral Resources Minister Mosebenzi Zwane, who's alleged to be close to the Gupta family, was part of the team, or what type of investor would be scared off by the banks deciding to cut ties with the company.

Meanwhile, questions have been raised as to whether government will also intervene on behalf of other private owned companies, which have been ditched by banks.

Political analyst, Daniel Silke, says if government is serious about questioning the modus operandi of the banking and the financial sector, then it shouldn't just be on behalf of the Guptas.

"It should also be on behalf of others who have had problems with the sector. Furthermore, this will most certainly be seen, by many, as a potential interference by government."

While Oakbay Resources and Energy today appointed SizweNtsalubaGobodo as its new auditing firm, after KPMG cut ties with the Gupta-owned company.

The company still needs to find a new JSE sponsor by 1 June, after Sasfin gave notice it would no longer serve this function.

All four major South African banks have also pulled out of several Gupta companies following claims that the controversial family has undue political influence on President Jacob Zuma.