Guiding consumers since 2009

Guptas set to buy bank

By Danielle van Wyk

The Gupta family have once again made headlines as one of their associates, Salim Essa in partnership with Hamza Farroqui, has shown interest in establishing a bank on South African shores under the Habib Overseas Bank banner. This comes after, the big four banks (Absa, Nedbank, FNB and Standard Bank) closed the Gupta family’s personal and business bank accounts and blacklisted them last year.

The battle between the big four banks and the Gupta’s continue, but they may be a shoe in as the Competition Commission approved the Essa and Habib merger without conditions earlier this week. According to reports, Essa and Farooqui paid the bank R450 million for the merger to take place.

The Gupta family is currently still under investigation by the Financial Intelligence Centre in connection with more than 70 banking transactions involving almost R7 billion. This has wreaked havoc for the Gupta-owned businesses as then CEO Nazeem Howa remarked that as a result 7500 jobs were in limbo, because doing business became considerably tougher.

The next step for the Essa and Farooqui bank will the Reserve Bank’s (SARB) approval. This will include a "fit and proper persons" test, as they will be owning 15% of the bank.

“The test would include examining its fiduciary oversight capacity, as well as the background of the acquiring entity in terms of governance, integrity and soundness,” reported Business Day.

SARB would also be responsible to conduct such a study on key executives and a select of nonexecutive directors of the bank. This has had many raising questions of the likelihood of the bank passing these prerequisites considering the known ties to the Gupta family.

The approval would further have to come from the office of Finance Minister Pravin Gordhan. He has in recent the past taken a strong position against corruption involving the Gupta family.

While the banking landscape will undoubtedly be affected, the question remains, as to how much. “The proposed transaction is unlikely to substantially prevent or lessen competition in any market. Further, there are no public interest concerns arising as a result of the proposed transaction,” the Commission told Fin24.

Insiders have reportedly stated that the application is before the Regulator currently, but this has not been confirmed.

ABSA, First National Bank and National Treasury failed to comment at the time of publication.

 Handy tip: Taking stock and occasionally comparing the costs of bank account offerings and products to what you are currently paying is always advised. To do so, click here.

Recent Articles

Featured The bank took money from my account – is this allowed?

You’ve just deposited money into your account and suddenly you see a notification from your bank. Money has been deducted from your account to pay the outstanding debt that you have with the bank. Is this allowed?

How much does it cost to draft a will?

Having a Will allows you to determine who inherits your property when you die. If you die intestate, the government will determine how to distribute your assets. Many people die intestate because they don’t know how to draft a will or are intimidated by the costs of drafting one.

Is your home correctly priced for the current market?

The property market is typically in either one of two phases, a buyers’ market or a sellers’ market. According to real estate experts, we are currently in a buyer’s market. For this reason, it is important as a seller to correctly price your house to ensure interested buyers and a valuable sale in the end.

Fuel rewards programme – how to fill up on petrol and points

South Africa’s volatile economy has often meant that factors like the fuel price bear the brunt. This year alone the country’s fuel price has fluctuated by between R1.50 to almost R3, which has put increasing pressure on motorists. That said, many of the bigger South African brands have provided some relief by way of fuel rewards programmes.


Wax On Wax Off Wednesdays at Rouge Day Spa

Price: From R50
When: Wednesdays
Where: Cape Town

Aarya Restaurant Christmas Lunch Special

Price: R425
When: 25 December 2019
Where: Johannesburg

Da Vinci’s Tantalising Tuesday Pizza Special

Price: Available on request
When: Tuesdays
Where: Cape Town