Bank of Baroda has “every right” to terminate business with Gupta-linked companies, court rules

Image Credits: Bank of Baroda

The Bank of Baroda has “every right” to terminate business contracts, specifically that of 20 Gupta-linked companies.

That’s the words of Judge Ntendeya Mavundla’s judgment on Monday in the High Court in Pretoria. He dismissed the application by 20 Gupta-linked companies who tried to prevent Baroda from cutting its ties and withdrawing from South Africa.

“The decision by the respondent (Baroda) to exit [the] South African banking sector‚ cannot‚ in my view‚ be interfered with by the courts‚” Mavundla said in his judgment.

“I therefore conclude that the respondent’s rights to trade or not to trade supersedes whatever right‚ if any‚ the applicants might have. I further conclude that the balance of convenience far outweighs that of the applicants (Gupta-linked companies) and tilts in the favour of the respondent (Baroda).”

Makgoka had ordered Baroda to continue providing banking services to the Gupta-linked companies to protect their 7 000 employees. He also prohibited the bank from ending its relationship with the Gupta businesses or closing their bank accounts.

The Gupta-linked companies argued that if Baroda left South Africa‚ it would contravene the judgment.

Mavundla said Baroda leaving South Africa is a commercial decision and the Makgoka order has “nothing to do” with it. “It cannot therefore be said that the exit is malafide (in bad faith) and calculated to frustrate the Makgoka order‚ or in contempt thereof.”

Advocate Azhar Bham SC‚ on behalf of Baroda‚ previously argued that the Gupta-linked companies artificially created the urgency of their application by not finding another bank and relying on Makgoka’s judgment.

Its customers include Gupta-linked companies Sahara Computers‚ VR Laser‚ Koornfontein Mines‚ Oakbay Investments‚ Oakbay Resources & Energy‚ Optimum Coal Mines‚ Shiva Uranium and Tegeta.

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