NEDCOR: 28,345 +176 (+0.62%)
Gupta banker Baroda quits South Africa
* Baroda says exit part of strategic shake-up
* Company will close doors on March 31
* Reserve Bank in talks with Baroda to protect depositors
(Adds Baroda comments, more details)
By Nqobile Dludla and Tiisetso Motsoeneng
JOHANNESBURG, Feb 12 (Reuters) - India's Bank of Baroda
, which counts the Guptas as clients, has pulled the
plug on its South African business, citing a strategic shake-up
to slim down in international markets.
Baroda's South African division was thrust into the
spotlight two years ago when it agreed to take on the Guptas
after corporate South Africa, including all four major banks,
turned its back on the family's businesses due to reputational
The Guptas, a trio of Indian-born brothers, have been
accused by the South African public anti-graft watchdog of using
their friendship with President Jacob Zuma to influence policy
Zuma and the Guptas deny any wrongdoing. The Guptas and
their companies have not been charged with any crime and they
say they are the victims of a politically motivated witch-hunt.
Bank of Baroda said on Monday it would shut its doors in
South Africa at the end of March as part of a plan to
rationalise its branches in international markets.
"The branch will stop taking new / incremental deposits and
disbursing loans with effect from 1st March 2018," it said in a
The South African Reserve Bank said it was in talks with the
bank to ensure its "orderly withdrawal from South Africa so that
no depositor is disadvantaged".
Baroda has about 3.9 billion rand ($325.99 million) worth of
assets in South Africa, significantly smaller than 1.2 trillion
rand and 979 billion rand at Standard Bank and
"The business in South Africa is not very significant and
will not have any major impact on the financials of the bank,"
the parent company said in an emailed response to Reuters.
Separately, a source with knowledge of the decision said in
addition to strategic shake-up, the Gupta scandal was among the
reasons for the company's decision to quit South Africa.
BLOW FOR GUPTAS
Baroda's decision will deal another blow for Gupta-owned
Oakbay Investments, which has interests in mining, hotels,
computers and engineering, one industry source said.
"It was inevitable for Baroda to pull the plug," the
industry source said.
Oakbay Investments was not immediately available for comment
Between December 2015 and April 2016, all four major South
African banks - Standard Bank, Nedbank,
Barclays Africa and FirstRand - terminated the accounts
of companies controlled by the Guptas, citing reputational risk.
In September, Oakbay lost a court bid to stop Bank of Baroda
from closing its accounts.
($1 = 11.9637 rand)
(Additional reporting by Davidutta Tripathy in Mumbai; Editing
by James Macharia and Jane Merriman)
First Published: 2018-02-12 13:19:13
Updated 2018-02-12 17:21:31
© 2018 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.