South Africa says Bank of Baroda holds ‘proceeds of crime’

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The South African unit of the Bank of Baroda has been in possession of the “proceeds of crime” linked to a dairy farm project involving the politically connected Gupta family, said Thato Ntimutse, a lawyer with the Asset Forfeiture Unit of the National Prosecutor’s Office .

While the Bank of Baroda of India has tried to prevent the state from freezing R $ 30 million ($ 2.5 million) of its funds in the dispute over dairy farms, it should be noted that the lender has come to take its own clients, the Guptas, to court to try to cut ties, said Ntimutse in the Bloemfontein High Court in the Free State province on Friday. Although state funds earmarked for the farm may also have gone through other banks in South Africa, Bank of Baroda has a single current account in which all funds are paid for legal and illegal money to be mixed, he said.

The case is related to a state farm in the Free State leased to the company Estina (Pty) Ltd. linked to Gupta in 2012. The regional government agreed to help develop the land, but the Supreme Court on January 19 gave the permit of the supervising authority to freeze project assets after more than 220 million rands destined for the farm were transferred to Atul Gupta, one of the three brothers, and several companies and associates. State prosecutors allege that Atul Gupta received 10 million rands.

The 30 million rand preservation order is incorrect because the money owed to customers had already been withdrawn and the seizure of an equal amount of the lender’s funds is “unsustainable,” said Luke Spiller, legal representative of the Bank of Baroda, in the court on Thursday.

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Atul Gupta, who did not appear in Bloemfontein on Thursday or Friday, has previously denied in the court documents that cash destined for the development of the dairy farm was transferred to his private bank accounts. The Bank of Baroda transferred the 10 million rands that Estina paid to a fixed deposit account in the name of the farm a few days after receiving the funds and did not go to Atul Gupta, according to his lawyer Rafik Bhana, who also spoke in Bloemfontein.

“The proof is not whether this is money laundering or not, it’s about 10 million rands,” Bhana said. “This is more than about the Guptas, this is about the rule of law.”

Atul Gupta, who signed his legal documents in Dubai, and companies linked to his family have requested the Bloemfontein court to reconsider the attachment of the assets. The Gupta family has close ties to former President Jacob Zuma and have been accused of using the association to win state business and influence government appointments. Zuma and the Guptas have denied wrongdoing. The repression of the dairy farm project came just weeks after South African President Cyril Ramaphosa replaced Zuma as head of the ruling African National Congress.