Treasury: Vardospan must follow process in bank purchase

The Gupta-linked Vardospan has approached the court to compel the Reserve Bank and the Finance Minister to make a decision on whether to authorise its purchase of the Habib Overseas Bank.

Picture: Supplied

PRETORIA – Treasury says the prospective buyers of the Habib Overseas Bank can’t expect a process which ordinarily takes at least four years to complete, to be completed in just seven months.

The Gupta-linked Vardospan has approached the High Court in Pretoria to compel the Reserve Bank and the Finance Minister to make a decision on whether to authorise its purchase or not.

Vardospan entered into a purchase agreement last year but has until Friday to have all the required authorizations for the seller to conclude the deal.

The Reserve Bank and National Treasury have opposed the application, saying the company has created its own urgency by trying to impose its own deadlines.

Treasury Director-General Lungisa Fuzile refers to legislation which contemplates a minimum four-year period in which a person can proceed from holding less than 15% shares in a bank to an excess of 75%.

He says Vardospan seeks in less than seven months to move from no shareholding to holding 99.9% of the shares in the Habib Oversees Bank.

Fuzile says the prospective shareholders are newly established companies with no known business activities, financial statements or management accounts.

He says the process of assessing Vardospan’s suitability to control a bank is considerably more complicated than the ordinary process, where a minority shareholder gradually becomes a majority shareholder.

The court will on Friday rule on whether the application is urgent before possibly hearing the main case.

(Edited by Leeto M Khoza)