S. African Court Says State Can't Intervene on Bank Clients
(Bloomberg) -- South Africa’s High Court said the government can’t intervene in the relationships between banks and their clients and dismissed an application from former Finance Minister Pravin Gordhan for a declaratory order on the matter.
“We hold the strong view that this application was clearly unnecessary,” Deputy Judge President Aubrey Ledwaba said in the ruling in Pretoria on Friday. “To grant the minister the declaratory relief would allow the judiciary to stray into the exercise of executive functions.”
The nation’s four biggest banks last year closed accounts linked to the Gupta family, who are friends of President Jacob Zuma and in business with one of his sons, citing reputation risk and regulatory concerns. Gordhan was pressured by the family to intervene and in October asked the court to order that he has no authority to stop banks from closing accounts of Gupta-controlled Oakbay Investments Ltd. All four banks including Standard Bank Group Ltd. and Barclays Africa Group Ltd. joined him in his application.
“The minister of finance accepts and respects today’s High Court judgment on Oakbay and will not appeal it,” National Treasury said in an emailed statement on Friday. Zuma replaced Gordhan as finance minister with Malusi Gigaba on March 31.
The minister was ordered to bear some of the costs of those involved in the case while Gupta-linked company Sahara Computers Ltd. was ordered to pay some of the application’s costs.
South Africa’s banks index, which declined as much as 0.8 percent, rose to trade 0.2 percent higher as of 1:09 p.m. in Johannesburg.