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Sarb: Why we didn't ok purchase of bank to Gupta-linked company

Vardospan approached the High Court in Pretoria to compel the Reserve Bank and Bank Registrar to approve its application for the overseas bank.

Lungisa Fuzile. Picture: treasury.gov.za.

PRETORIA - The South African Reserve Bank has cited the Public Protector's State of Capture report as among the reasons for not approving the purchase of a bank to a Gupta-linked company.

The company, Vardospan, has approached the High Court in Pretoria to compel the Reserve Bank and Bank Registrar to approve its application for the overseas bank.

Vardospan entered into a purchase agreement in August last year and has until Friday to obtain approval to conclude the deal.

Treasury director general Lungisa Fuzile says Vardospan majority shareholder Salim Essa and three Gupta-linked companies he's a shareholder of were implicated in the State of Capture report.

Fuzile says the Public Protector has referred a report for further investigation. He says until such time as Finance Minister Pravin Gordhan can be satisfied there are no grounds for suspicion of Essa and the three companies, he can't approve the bank purchase deal.

It also emerged that Essa has failed to provide the Reserve Bank with audited financial statements of the three Gupta companies he is a director of.

Fuzile says the urgency of the application is self-imposed and Vardospan can't expect to hold Treasury to its own deadlines.

On Thursday Vardospan tried to convince the High Court that its case against the Reserve Bank and Finance Minister is urgent and should be placed on the roll to be heard.

It intends asking the court to compel the Reserve Bank and Gordhan to make a decision on whether or not to approve the deal which was entered into in August last year.

Reserve Bank advocate Gilbert Marcus says Vardospan has displayed a complete failure to appreciate the complexity of the approval process.

“The duration of this process cannot be easily determined as it is influenced by numerous factors, including but not limited to, the nature and complexity of the application and the completeness and relevance of information submitted."

(Edited by Refilwe Thobega)

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