South Africa

South Africa

Fin24: Gupta coal mine to pay salaries late after court bid fails

By Fin24
22 Sep 2017 0

Optimum Coal Mine will pay its employees late this month, after the North Gauteng High Court on Thursday dismissed the Guptas’ urgent court bid to prevent the Indian-based Bank of Baroda from closing its accounts. By Jan Cronje for Fin24.

In an email to employees following the decision on Thursday, the mine’s general manager Howard Pyoos said employee salaries would be paid late, on Wednesday September 27, instead of on Friday.

“Today a judgment was delivered in the North Gauteng High Court, in which Oakbay Investments and all its subsidiary companies lost the bid to halt the Bank of Baroda from closing its account. Oakbay has subsequently been instructed to move all money out,” wrote Pyoos.

“The funds in these accounts will only be available to transact with on Tuesday, 26 September, when it is brought back into the country again,” he said. “The company sincerely regrets the impact this action has had on all employees, but unfortunately the matter is completely beyond our control.”

Last hope

The Bank of Baroda had been the last hope for Optimum Coal Mine and 19 other Gupta-affiliated companies to retain banking services in South Africa. 

Absa, Nedbank, Standard Bank and First National Bank had all previously shut their Gupta-linked bank accounts. So have the Bank of China, the Bank of India and the State Bank of India.

After the Bank of Baroda in March said that it too would close its Gupta accounts by the end of August (later extended to the end of September), the Guptas lodged an urgent application to compel the bank to keep providing them with banking services.

This is the application that was dismissed on Thursday with with costs. The accounts will be shut by the end of September.

In addition to Optimum Coal Mine, other Gupta-related companies who lodged the application include Koornfontein Mines, Annex Distribution, Confident Concepts, Sahara Computers, VR Laser Services, Islandsite Investments 188,  Oakbay Investments, Shiva Uranium, Tegeta Exploration, Westdawn Investments, Idwala Coal and Mabengela Investments.

Meanwhile, in a separate case, the Organisation Undoing Tax Abuse (OUTA) on Thursday lodged an urgent interdict with the North Gauteng High Court to freeze R1.75bn in mine rehabilitation funds from Optimum and Koornfontein coal mines.

These funds are meant to manage environmental damage caused by mining.

“We want to ensure that this money doesn’t leave the country or find its way into the Gupta family’s pockets,” said OUTA’s chief operating officer Ben Theron. DM