Ex-Standard Bank Lawyer Tells of Pressure to Serve Zuma Allies

JOHANNESBURG (Capital Markets in Africa) – A former Standard Bank Group Ltd. lawyer testified that the South African lender resisted pressure to reverse its decision to close accounts linked to members of the Gupta family, who are friends of former President Jacob Zuma, after they were implicated in a series of suspicious transactions.

Ian Sinton, who retired as Standard Bank’s group general counsel in June, was testifying on Monday at the judicial panel investigating the use of political connections to loot billions of rand in taxpayer funds and influence the awarding of government contracts — a process known locally as state capture. Standard Bank stopped doing business with the Guptas’ companies in 2016, and they have since ceased operating.

Then-Mineral Resources Minister Mosebenzi Zwane and Labor Minister Mildred Oliphant asked Sinton and Standard Bank Chief Executive Officer Sim Tshabalala to explain the lender’s actions at a meeting in 2016, according to the testimony. Zwane said the government feared job losses and warned that as a member of the ruling African National Congress he could get the law changed to make it illegal for accounts to be closed, Sinton said.

“The meeting was an attempt by two cabinet ministers on behalf of the cabinet to get us to retract the decision to close the accounts of the Gupta entities,” Sinton said. “There was no other reason for the meeting.”

One of the two ministers suggested the bank prioritize the needs of the Gupta companies’ 7,500 employees over its obligation to comply with the law, Sinton said, but he couldn’t remember which of them made the comment. Jimmy Manyi, the former head of the government communication service who later bought the Guptas’ media units, was also present at the meeting, he said.

Sinton was the seventh witness to appear before the panel, which is headed by Deputy Chief Justice Raymond Zondo. Four of them who served in senior government posts also testified how leading politicians abused their authority to benefit the Guptas and their associates during Zuma’s rule.

While much of the information is already in the public domain, the testimony is helping fill in gaps about how state capture developed and may form the basis for future prosecutions. The nation’s anti-graft ombudsman implicated the three Gupta bothers in state capture in 2016.

The Guptas, who have left the country, Zwane, Oliphant and Manyi have all denied wrongdoing. Zuma, who stepped down in February under pressure from the ruling party, also disputes allegations that he did anything wrong and rejects the notion that his administration was under the Guptas’ control.

Sinton said the ANC invited the bank to a separate meeting to discuss the account closures. The party’s then-secretary-general, Gwede Mantashe, now the nation’s mines minister, his deputy, Jessie Duarte, and Enoch Godongwana, the ANC’s head of economic transformation, also voiced concerns about job losses and questioned if the account closures couldn’t be reversed, he said.

“We made it clear to the ANC representatives, we were not in a position to discuss the affairs of our customers” or the reasons for closing accounts, Sinton said. “We were simply applying the law.”

Other banks that shut Gupta-controlled companies accounts are also due to testify this week.