IN THE HIGH COURT OF SOUTH AFRICA cape tha orks, (GAUTENG DIVISION, PRETORIA) In the matter between: MINISTER OF FINANCE and OAKBAY INVESTMENTS (PTY) LTD OAKBAY RESOURCES AND ENERGY LTD SHIVA URANIUM (PTY) LTD ‘TEGETA EXPLORATION AND RESOURCES (PTY) LTD JIC MINING SERVICES (PTY) LTD BLACKEDGE EXPLORATION (PTY) LTD ‘TNA MEDIA (PTY) LTD ‘THE NEW AGE AFRICA NEWS NETWORK (PTY) LID VR LASER SERVICES (PTY) LTD ISLANDSITE INVESTMENTS ONE HUNDRED AND EIGHTY (PTY) LTD CONFIDENT CONCEPT (PTY) LTD JET AIRWAYS (INDIA) LTD (INCORPORATED IN INDIA) eo9é]l« First Respondent + Second Respondent “Third Respondent Fourt Respondent Fifth Respondent Sixth Respondent Seventh Respondent Fighth Respondent ‘Ninth Respondent ‘Tema Respondent Eleventh Respondent Twelfth Respondent Thirtcenth RespondentSAHARA COMPUTERS (PTY) LTD Fourteenth Respondent ABSA BANK LTD Fiflgenth Respondent FIRST NATIONAL BANK LTD. Sixteenth Respondent STANDARD BANK OF SOUTH AFRICA LIMITED Seventeenth Respondent NEDBANK LIMITED Eighteenth Respondent GOVERNOR OF THE SOUTH AFRICAN . RESERVE BANK ‘Nineteenth Respandent REGISTRAR OF BANKS ‘Twentieth Respondent DIRECTOR OF THE FINANCIAL INTELLIGENCE. ‘Twenty-First Respondent CENTRE NOTICE OF MOTION TAKE NOTICE that on a date to be determined by the Registrar of the above Honourable Court, the applicant intends to upply for an order in the following terms: 1. Declaring thet the applicant is not by law empowered or obliged to intervene in the relationship between the first to fourteenth respondents, and the fifteenth to eighteenth respondents, as regards the closing of the banking accounts held by the former with the latter. 2. For further of alternative relief. 3. For casts of suit as against any respondent(s) entering opposition 10 this application, jointly and severally, the one puying the other to be absolved. TAKE NOTICE FURTHER that the affidavit of PRAVIN JAMNADAS GORDHAN and its annexures will be used in support of this application.TAKE FURTHER NOTICE that if you intend opposing this application you are required: (8) to notify the applicant's attorneys, in writing, no later than five days after delivery rereat’ and (b) within fifteen days thereafter fo deliver any answering affidavit. ‘TAKE NOTICE FURTHER that you are required to appoint in the notification referred to in (a) above an address referred to in Rule 6(5}(b) of the Uniform Rules of Court at which you will accept notice and service of all documents in these proceedings (preferably an emait address). YAKE FURTHER NOTICE that if no such notice of intention to oppose is given, the application will be set down for hearing on a date and at a time to be asranged with the Registrar of the dbove Honourable Court, not being fess than ten days after service of this notice of motion. SIGNED AT PRETORIA ON [3 OCTOBER 2016 STATE ATTORNEY Attomey for the applicant SALU Building 255 Francis Baasd Street Pretoria Tel: 012 309 1575 Fax: 012 309 1649 Email: TNhlanzi@justice gov.za Ref: Ms T NhlanziTa: AND TO: AND TO: THE REGISTRAR High Court, Pretoria OAKBAY INVESTMENTS (PTY) LTD First Respondent Grayston Ridge Office Park, Block A ‘Lower Ground Floor, 144 Katherine street, Sandown Sandton Telephone: +27(0)11 430 7640 FAX: +1 0123-4567-8900 E-mail: info@oakbay.co.2a OAKBAY RESOURCES AND ENERGY LTD Sceond Respondent 89 Gazelle Avenue Corporate Park South Midrand SHIVA URANIUM (PTY) LTD Third Respondent 1A BERG STREET Harteboesfontein North West. 2600 Tel: 0184679000 Fax: 018 467 9040 TEGETA EXPLORATION AND RESOURCES (PTY) LTD Fourth Respondent Grayston Ridge Office Park, Block A Lower Ground Floor, 144 Katherine Street, Sandown fad 011 262 3868, JIC MINING SERVICES (PTY) LTD Fifth Respondent TIC House 16” Road MIDRANDAND TO: AND TO: AND TO: AND TO: BLACKEDGE EXPLORATION (PTY) LTD Sixth Respondent 89 Gazelle Avenue Corporate Park South MIDRAND TNA MEDIA PTY) LTD Seventh Respondent 52 Lechwe Street Corporate Park South Old Pretoria Main Road MIDRAND 1685, TEL: 011 542 1222 FAX: 086 733 7000 ‘THE NEW AGE Kighth Respondent 52 Lechwwe Street Corporate Park South Old Pretoria Main Road MIDRAND 1685 ‘TEL: O11 $42 1222 PAR: 086-733 7000 AFRICA NEWS NETWORK (PTY) LTD ‘Nimth Respondent Fourth Floor, Sandown Mews 88 Stella Street, Sandton, Johannesburg TRL: O11 542 1222 FAX: 086 733 7000 VR LASER SERVICES (PTY) LTD. ‘Tenth Respondent Grayston Ridge Office Park, Block A Lower Ground Floor, 144 Katherine Street, Sandown, SandtonAND TO: AND TO: AND TO; AND TO: AND TO: ISLANDSITE INVESTMENTS ONE HUNDRED AND EIGHTY (PTY) LID leventh Respondent 89 Gezelle Avenue Corporate Park South Old Johannesburg Road ‘Midrand 1685 CONFIDENT CONCEPT (PTY) LTD. ‘Twelfth Respondent 89 Gazelle Avenue Cotporate Park South Old Johannesburg Road Midrand 1685 JET AIRWAYS (INDIA) LIMITED (INCORPORATED IN INDIA) “Thirteenth Respondent St Floor, Bedford Centre Office Tower ‘Smith Road Bedford Gardens 2008 Johannesburg, SAHARA COMPUTERS (PTY) LTD 89 Gazelle Avenue Corporate Park South Old Johanneshurg Road Midrand 1685 ABSA BANK LTD Fifteenth Respondent 7% Floor Barclays Towers West 15 Troy Street Johannesburg, JHRST NATIONAL BANK LTD Sixteenth Respondent 6% Floor, 1 First Place ENB Bank City Simmonds Street JohannesburgAND TO: AND TO: AND TO: AND TO: AND TO: STANDARD BANK OF SOUTH AFRICA Seventeenth Respondent 98 Floor Standard Bank Centre 5 Simmonds Street Johannesburg NEDBANK LIMITED Eighteenth Respondent G Block 3” Floor Desk 135 Rivonia Rd Sandown Sandton THE GOVERNOR OF THE SOUTH AFRICAN RESERVE BANK ‘Nineteenth Respondent 370 Helen Joseph Street Pretoria ‘SHE REGISTRAR OF BANKS, Twenticth Respondent 370 Helen Joseph Street Pretoria DIRECTOR OF THE FINANCTAL INTELLIGENCE CENTRE ‘Twenty First Respondent Woodhill Centre St. Bernard Drive Garefontein. PretoriaIN THE HIGH COURT OF SOUTH AFRI (GAUTENG DIVISION, PRETORIA) In the matter between: 20 -10- 14 omen, ae MINISTER OF FINANCE And OAKBAY INVESTMENTS (PTY) LTD OAKBAY RESOURCES AND ENERGY LTD SHIVA URANIUM (PTY) LTD TEGETA EXPLORATION AND RESOURCES (PTY} LTD JIC MINING SERVICES (PTY) LTD BLACKEDGE EXPLORATION (PTY) LTD TNA MEDIA (PTY) LTD THE NEW AGE AFRICA NEWS NETWORK (PTY} LTD VR LASER SERVICES (PTY) LTO ISLANDSITE INVESTMENTS ONE HUNDRED AND EIGHTY (PTY) LTD CONFIDENT CONCEPT (PTY) LTD ICA Case no 12016 Applicant First Respondent Second Respondent Third Respondent Fourth Respondent Fifth Respondent ‘Sixth Respondent ‘Seventh Respondent Eighth Respondent Ninth Respondent Tenth Respondent Eleventh Respondent Twelfth RespondentJET AIRWAYS (INDIA) LTD Thirteenth Respondent (INCORPORATED IN INDIA) SAHARA COMPUTERS (PTY) LTD Fourteenth Respondent ABSA BANK LTD Fifteenth Respondent FIRST NATIONAL BANK LTD Sixteenth Respondent STANDARD BANK OF SOUTH AFRICA Seventeenth UMITED Respondent NEDBANK LIMITED Eighteenth Respondent GOVERNOR OF THE SOUTH AFRICAN Nineteenth Respondent RESERVE BANK REGISTRAR OF BANKS Twentieth Respondent DIRECTOR OF THE FINANCIAL INTELLIGENCE Twenty-First CENTRE Respondent FOUNDING AFFIDAVIT | the undersigned, PRAVIN JAMNADAS GORDHAN solemnly affirm that: 1. 1am the Minister of Finance, and in that capacity also head of the National Treasury of South Africa, and the applicant in this matter. t was appointed to this position in December 2015 (having previously served in the same capacity for over five years from 2009 to 2014). 2 The contents of this affidavit are, save where the context indicates: ofotherwise, within my personal knowledge or derived from records and information under my control. They are true and cofrect, Where | make egal submissions this is based on advice by my legal representatives. This is an application for declaratory relief arising from a dispute relating to Powers of intervention by Government in relation to the closing of private clients’ accounts by registered banks. This dispute has arisen in circumstances which have considerable importance for the operation of the banking sector of the South African economy, and its regulation by Govemment. The related controversy has received both national and Intemational attention, and it is clearly in the public interest, the interest of the affected clients and relevant banks, and employees of both that It be authoritatively resolved. The first to fourteenth respondents are registered companies in the Oakbay group of companies (collectively, “Oakbay"), Their names, registered offices and principal places of business within the jurisdiction of this Court are reflected in the notice of motion. To avold prolixity these details are not repeated here. ‘The fifteenth to the eighteenth respondents are registered South African banks (collectively, ‘the banks’). Their names, registered offices and principal ptaces of business are likewise reflacted in the notice of motion. The nineteenth respondent, the Governor of the South African Reserve Bank (‘Reserve Bank’), is cited by virtue of any interest he may have in this application. The twentieth respondent, the Registrar of Banks, is cited by virtue of any interest he may have in this application, in particular pursuant to authe provisions of sections 4 and 7 of the Banks Act 94 of 1990. The twenty first respondent, the Director of the Financial intelligence Centre, is similarly cited pursuant to any interest he may have in the application pursuant to the Financial Intelligence Centre Act 21 of 2001 (FICA). In April 2016 it was publicly announced on behalf of Oakbay, controlled al the time by the Gupta familly, that their banking accounts had been closed by the banks. Oakbay also announced that its auditors, KPMG, and its sponsor on the Johannesburg Stock Exchange, Sasfin, have similarly terminated their relationships with Oakbay. According to a series of public statements by Oakbay, its executives thereafter engaged in urgent approaches to their bankers with a view to Clarifying the basis on which thay each took the individual decision to close Oakbay’s accounts. At the same time Oakbay made public statements contending that the banks had acted irregularly, and indeed improperly, in closing the accounts, Oakbay also proceeded to direct representations and demands to me as the Minister of Finance. In short, Oakbay demanded that on behalf of Government | intervene with the banks to achieve a reversal of their decisions. Ina first letter to me dated 8 April 2016, Oakbay contended that “the unexplained decision of a number of banks, and of our auditors, to cease working with us", was “the result of an anti-competitive and politically-motivated campaign designed ‘40 marginalise our businesses. We have received no justification whatsoever to explain why ABSA, FNB, Sasfin, Standard Bank and now Nedbank have ah12. decided to olose our business accounts. ... As the CEO | now hope to draw a line under the corporate bullying and anti-competitive practices we have faced from the banks.” | attach a copy, marked "A", Naturally these serious allegations were a source of concern, particularly in view of the number of jobs {7 600) stated by Oakbay to be at risk. A further (etter followed on 17 April 2016 (attached, marked “B’). It offered “our deepest apology and regret” if the first letter had come across otner than an appeal for assistance to save jobs. It asked to be advised “about any possible assistance you are able to offer us in these trying times". The letter was closely followed by two open letters, one to the CEOs of the banks and one in similar terms to me, on behaif of two “employee representatives”. In my capacity as Minister of Finance, | was concemed to explore any respect in which | could properly, in terms of law, address the situation arising {tor Gakbay’s serious allegations concerning the banks, and the job losses It predicted as imminent, To that end a meeting was arranged on 24 May 2016 with Oakbay representatives, senior Treasury officials and myself. Prior to the meeting, | had taken steps to obtain independent legal advice by ‘senior counsel in important respects relevant to the apparent issues, ‘This advice was provided in an opinion by senior and junior counsel dated 25 Aprit 2016. | attach a copy, marked “C*, For brevity | do not repeat at length the contents of that legal advice. | ask that annexure C be regarded as incorporated herein, In short, counsel advised that the National Executive (comprising Cabinet and such individual ah14. Ministers as may be appointed by the President) are govemed by the Constitution and national legislation. They are accordingly entirely “creatures of statute" with only such powers as the law itself confers on them. Nothing in law, the opinion advised, authorised governmentat intervention with the banker-client relationship erising by contract. The opinion also emphasised the obligations imposed by the Basel Committee ‘on Banking Supervision at the Bank of International Settlements on South African banks. The Committes had imposed an intemational duty regarding know-your-customer (KYC) standards. | was further advised that required KYC policies and practices “not only contnbute to a bank's overall safety and soundness’, but also “protect the integrity of the banking system by reducing the likelihood of banks becoming vehicles for money-laundering, terrorist financing and other unlawful activities." (These aspects are addressed more fully in paras 17-19 of the opinion.) These principles, | was further advised, are given effect to in domestic law by the FICA. In addition, the Banks Act imposes reporting duties, requires the Registrar of Banks under certain circumstances to disclose infarmation reported to him to third parties, and contemplates that any concems regarding the banking sector be communicated by the Registrar to inter alios the Minister of Finance (paras 19-21 of the opinion). South African banks not complying with their Basel or domestic duties are furthermore subject ta fines by foreign and domestic authorities, and to steps being taken against them outside and inside South Africa. &16. On 24 May 2016, following my meeting with Oakbay's CEQ, Mr Nazeem Howa, | wrote to him. attach a copy of the letter, marked “D”. | again ask that it and its attached alde memoire be regarded as incarporated hereln. My officials and | sought to provide assistance by altaching an information document explaining in outline the regulatory framework governing the banking and financial sectors. | also drew attention to sources of further information, both nationally and internationally. The latter reiterated the legal impediments to any registered bank discussing clientrelated matters with me or any third party. | stressed that “the Minister of Finance cannot act in any way that undermines the regulatory authorities". | encouraged Oakbay to achieve a determination of its contentions by approaching a court. Finally | requested Oakbay to desist from lis attacks on the integrity of National Treasury, in the public interest. Also on 24 May 2016 | received a letter from Oakbay, attached marked “E*. Oakbay here significantly places on record that on its own legal advice, any legal approach by it challenging the closure of the accounts or the basis on which this had been clfected ‘may indeed be stil-bome’. it Is further apparent that Oakbay recognised that “as case law suggests, [any legal approach] will fail in a court of jaw’. The lefter however both asserts 2 continued intention by Oakbay 10 “appeal to you for assistance”, and a suggestion that the banks had closed the accounts without “any indication of at any wrongdoing on our side ... we have done nothing wrong”.17. In view of Oakbay's persistence in its stance, | sought further advice from senior and junior counsel. | attach a copy of their additional opinion, dated 20 May 2016 as annexure “F” On 28 June 2016, | received a further Oakbay letter, this time from the CEO of Sahara, the fourteenth respondent, again apobgising for public statements made in the media but also again pressing me “to serve the national purpose". | attach a copy marked “G"_ ‘The continued assertions by Oakbay that, as Minister of Finance, | should intervene in, or exert pressure upon, the banks regarding their closure of the Oakbay accounts is harmful to the banking and financial sectors, to the regulatory scheme created by law, and the autonomy of both the governmental regulators and the registered banks themselves. It is well- known that the Intemational financial environment has been extremely difficult since 2008. The proper conduct of the financial regulatory scheme Is, clearly in the public interest. So too are the jobs of the affected individuals (which Oakbay has variously estimated at 6 000, 7 500 or 15 000), for which | as Minister of Finance would always have a considerable concem, as well as the serious allegations detailed above contending that the banks have ‘acted irregularly and indeed quite improperly in terminating the accounts. As | have indicated, my encouragement to Oakbay that its contentions be established in a court of law have been resisted. Oakbay indeed placed it en record that its own “detailed” legal advice from several sources was that it had no basis to challenge the banks’ decisions. (Inconsistently with this, as will become apparent, Oakbay has more recently suggested that it may well =f20, 21. 22. yet seek to tum to the courts, evidently at a time of its choosing). ‘This notwithstanding, as will be apparent from the aforegoing, Oakbay has persisted in its allegations, and the dispute regarding my capacity in particular to intervene with the banks has continued. Given Oakbay's failure to approach the courts, or any commitment to do 80, on 28 July 2016 | wrote both to the Registrar of Banks (the twentieth respondent) and to the director of FIC (the twenty first respondent), } attach copies of these letters marked "H” and “I”. | should note that / had previously received a [etter from the nineteenth respondent, dated 26 Aprii 2016, in which the Governor of the Reserve Bank raised his independent concems regarding the deleterious effect on the banking sector of the contentions made by Oakbay. | altach a copy marked "J. ‘To my letters “H” and ‘I" | received the response | annex marked "k’. It is evident that, notwithstanding the assertion by Qakbay on 24 May 2016 that it holds the "view that we have done nothing wrong” and that ‘no bank has given us any indication of any wrongdoing on our side’, each of the banks has considered itself under a legal duty pursuant to the international and domestic statutory instruments applying to tt to report over a significant period matters regarding the conduct of Oakbay accounts such as to fall within the purview of these instruments. That Oakbay itself is aware of this is apparent from the following public statement made by Mr Howa In an interview with Carte Blanche (an Investigative television production) screened by M-Net on 19 June 2016. Mr a24. 25. 10 Howa divulged that one of the banks ciosing accounts had given the following reasons, when requested by Oakbay to do so: “Without waiving our rights not to furnish reasons for our decision [and] without inviting any debate about the correctness of our decisions, t point out that the law, inclusive of South Africa's Companies Act, Regulation 43 (sic}, Prevention of Organised Crime Act, Prevention and Gombeting of Corrupt Activities Act and the Financial inteligence Centre Act, as well as the USA's Foreign Corrupt Practices Act and UK's Bribery Act, prevent us from having dealings with eny person or entity who a reasonably diligent (and vigilant) person would suspect that such dealings could directly or indirectly make us a Party to pr accessory to contraventions of that law.” Should Oakbay challenge the proposition that any or all of the banks was indeed bound by law to report under FICA in such terms, it is open to Oakbay in terms of section 20(4)(c) or (d) of FICA to require the banks to disclose to this Court the tuli contents each of the reports in question. If the banks have acted lawfully and within the parameters of their statutory duty these should evidence the bases on which each reporting bank has concluded that the dealings in question could directly or indirectly make that bank a party to or accessory to contraventions of law, Conversely, the full reports, if disclosed pursuant to FICA, would confirm whether there is any substance to the serious contentions advanced by Gakbay that the banks have acted improperly in closing the accounts. Similarly, | am advised, it is open to the banks in answering this application to disclose such reports in terms of the sane provisions. Re26. 27, W On 25 July 2016 my office received a further letter from Mr Howa, @ copy of which | attach marked “L”. | responded on 10 August 2016 in the terms apparent from annexure “M", stressing the need for a satisfactory answer from Mr Howa in writing by Friday 12 August 2016. To this Mr Howa replied ‘on 17 August 2016 (a copy of which | atlach marked “N’}, simply to the effect that he was “currently out of the country’, and that he would not meet this timeframe. | received no further communication, until an email dated 9 September 2016, 2 copy of which | atfach marked “O". In this Mr Howa expressed the view that it would be “preferable” again to meet, ostensibly to consider a “full file of correspondence" (which, despite my previous request, he still had not produced). He stated that the meeting would add “considerable flavour’ to the correspondence. | gave careful consideration (taking into account legal advice) to the appropriateness of another meeting, for the purpose intended by Mr Howa. There has been no such further meeting. Oakbay still has failed to produce the documentation to which Mr Howa has referred, and still has not provided the satisfactory answer {referred to above). Previously, on 4 August 2016, | had received a letter with an attached certificate from the Director of the FIC. | attach a copy, matked "P1” and “P2". This reflects the increasingly serious state of affairs which has arisen. This is lustrated by the number and scale of reported transactions linked to Oakbay. Just one example is the reporting of an amount of R1,3 billion as a suspicious transaction, in terms of the FICA, relating to Optimum Mine Rehabilitation Trust. Indeed, as appears from the further attached letter of 27 June 2016 (annexed, marked "G") from attorneys acting for the business eX28. 20. 12 rescue pfactitioners of Optimum, ‘with the written approval of the Department of Mineral Resources” R1,3 billion was intended to be transferred from the account closed by Standard Bank to the Bank of Baroda. For this the further approval of the Reserve Bank was sought. | am not aware as to whether the transfer to the Bank of Beroda was effected from the closed Optimum account held by Standard Bank. This is a matter ‘that may be clarified by the Reserve Bank and Standard Bank. Itis important that payment of funds to a mining rehabilitation trust in principle qualifies for a tax deduction in the hands of a taxpayer. in tum the mining rehabilitation trust is exempt from tax. If those funds from the trust were to spent on anything other than genuine mining rehabilitation, it will expose the fiscus not only to the loss of tax revenue and also put the burden of mining rehabilitation on the fiscus. Given the circumstances | have described, the grant of the declaratory orders ‘sought is called for, in the public interest, The continued public assertions that registered banks within the regulatory environment in South Africa acted for no adequate reason, irregularly and indeed for improper reasons in closing accounts are harmful to the reputation for integrity of South Africa's financial and banking sectors. So too is the continued uncertainty arising from Oakbay's simultaneous disinclination itself to seek a court's ruling. That uncertainty is prejudicial, as stated, to financial stability and the standing of the South African regulatory authorities, the operation of the banking and financial sectors, the South African economy at large and the employees whose interests Oakbay invokes.13, 30. | accordingly ask for an order in terms of the notice of motion. | respecttully ‘submit that it would be both in the public interest and in the interests of justice for this application to be heard and determined on as expeditious a basis as is possible. In this regard, | understand that a request will be directed to their Lordships the Judge President and the Deputy Judge President. PRAVIN JAMNADAS GORDHAN | certify that this affidavit was signed before me at PE FCRIA on this oa the \& day of October 2046 by the deponent who acknowledged that he knew and understood the contents of this affidavit, and solemnly affirmed the truth of thereof. Pisauuxel ERASE COMMISSIONER OF OATHS, SES rHATR ETRE ION Neme: " ELEANOR DELAINE GROENEAALD oe COMMISSIONER OF OATHS eaworrige Address: EXOFFIQO, : LEGAL OFFICIAL ‘BAPOLICE SERVICE! PRESIOIA BUILDING 255 PAI Capacity: PRETORA DAKBGAY Crs resb gig ee i Minister's Office Minisny of Finance 120 Plein Steset Cope Towns Oakbay Investmnents 144 Ketherine Street Sandion 2031 8" Apel 2016 Dear Minister Pravin Gordhea, RE: 7,500 POTENTIAL JOB LOSSUS AT OAKBAY INVESTMENTS & OUR PORTFOLIO COMPANIES I wanted to take this apporwnity to provide you with advance warning that Oakbay Investments and our portfolio companies may 200m be incurring significant job losses. Following the unexplained decision of # mumber of banks, and of our anditees, to ‘cesse working with ux, and of continued prees coverage of unsubstantiated and false allegations against the Gupta family, it has become viriuelly impossible to contioue to do business in South fica. ‘We beliove that this is the resuli of an anti-competitive and politically motivated ‘cempaign designed to marginalise our businesses. We have received no justification whatsoeves to explain why ABSA, FNB, Sasfin, Standard Bank and now Nedbank have decided wo close our business accounts. KPMG themsclves seld that there wus 20 sudit reason to end their Work with us, Onkbuy has 0 23 year track record of strong buiinass performance and tumarousid skills in a wuraber of sectors. Our ability to be a disruptor in new sectors, challeaging the dominant businesses and global players in Somlh Alfica, is the source of our sucess, Between 2012 and 2015, 47,000 jobs bave been lost in South Aftica’s mining asator. 1s fact, since 2015, the top three mining companies in South Africa have made more ‘than 10,000 people redundacs. In sontmst, We have created 3,500 jobs in mining. Our acquisition of Optimum from Glencore also prevenied a Liquidation that would bave seen more than 3,000 South African mining jobs lost, All of these jobs are now al risk, ‘With our bank accounte closed, we are currently wasble to pay many of the salaries of ‘our more than 4,500 employces, Wo find it totally unacceptable that the tms of thouswnds of their dependents would have to suffer as a result ofthe campaign epainst ‘Galehay and the Gupta femity.‘Therefore the Gupta family have come to the conclusion that it fe time %0 selinquish contral of ‘©akbay Investments and have stepped down from all executive and ror-exacutive positions and arly invoWemertt in the day-to-day running of the business. By doing sp, they hope fo end the palltical cammpaign against Oakbay. AS the CEO I now hape to drow @ line under the corporate buflying and snti-competitive practices we rave faced from the banks. The livallhoads of too many people are at risk should our bank accounts. remain closed. Thope that you appreciate my csndour and can soe that we are doing everything we can to save thousands of South African jobs. sf ou have any questicins, plewre do not hesitate to contact 2. Yours sincerely Mie CEO, Oakbay Investments_ — gb OAKBAYT INVESTMENTS (PTY LTD. 17 April 2016 The Hon. Pravin Gordhan ‘Minister of Finoace Republic of South Africa ‘Dear Minister RE: Apology ‘Let me start with our deepest apology uni regret if ows recem letier to you clue actoas in any way other than a heartfelt eppeal for assistance to save tho 7500 jobs ‘within our group following the decision by financial instinitious to out ties with us. U watched your interview with Richard Quest on CNN last week Thiraday and ‘thought I should offer my sincere spologies to you 2s It wes never our intanticm Yo come actos with any other message other than @ plea fo you as political bead for the ‘nancial sector to assist us in avoiding this huge Impact on the tives of around 50.000 people, if we inchide families of our employees, With your Jong history as x lesder within cur democratic struggle, I know you tid the Hyelitoods of our people very dear to your heart and would hope you woutd seoept our unequivocal apology. Lam sure you would agree that cur fragile coomomy ‘cannot in any way afford s single unnegesaary job-loss, never mind the 7500 people which would De affected shoubd we not be able to revere the ourneut hardline elance As you are aware the shareholder has resigned al] executive end won-cxecutive roles #5 car oup #2 x move 1 aden he eoaomns of te panies abet pose ‘association risk, yet we itave found the response from the institutions 1 inmewig, ean the face of tn real te of elgecan ob lower aed ae ‘concomitaal impact on our eoonnany. Given your etmng selationship with the captains of industry, youl implore you 12 ‘Liook forward to heating from you about any poeeible assistance you are able 1 offer vs in these trying timer. ‘Yours sincerely Kai Chief Executive: Oakbay Investments‘Ey parte: Inve: ‘Chembers Cape Town 25 April 2016 Y CONFIDENTIAL AND 1} MINISTER OF FINANCE INTER-MINISTERIAL COMMITTEE iN RESPECT OF ALLEGATIONS LEVELLED AGAINST FINANCIAL INSTITUTIONS OPENTON: J.J. GAUNTLETI SC EB, PELSER‘Our consultant is the Minister of Finance (“the Minister”), ‘Wehave been asked tn provide urgent advice on the power of members of the National ‘Baevutive, in particular the Minister, to intervene én banker-client relationships. This is the exseutiat question for advice. Pipht relaved and ancillary iesven uve been identified in our instructions for consideration: @ w aw the contractual rights of banks to choose their customers, particularly in the Yight of requirements relating to internstional anti-money-lamndering, combatting the financing of terrorism (AML-CFT), and politically-exposed persons (PEPs); ‘Government's potential exposure of South African banks to fines by the UK and USA authorities, where they are perceived to be weak on RAT standards and in the contert of South Affican banks having previguily been fined by the UK's Financial Conduct Authority and Barclays PLC in its latest results noted that ABSA had lodged suspicious transaction reports without much response fram the South African prosecuting avthorities: tnd the potentisl effect of a lage fine against s South Affican bank by the US or UK authorities to undermine South Africa's financial stability objective, sperking 2 2008-typc economic crisis in South Afiicas -wisther banks cam disclose infomation to the Minister regarding indivisiual clients in temas of the Protection of Personal information Act; and whether banks oan provide such informtion to anyone eee, like the SARB or the BarkGv) “ wy iy wit) Supervision Department, the Financial Services Bound, the Financial intelligence Centre, or SARS; ‘Whether any provision in the Banks Act provides for intervention by the Minister ina specific banker-clieat relationship; ‘whether the Oakbay-caso fite within the reat of the Banking Ombudsman; ‘what a reasonable period is for banks to give tn clicats whon termining banker Client elationships; hhow de-tisking by banks sary undermine Governments’ (unlegisiuted fimnciat- inclusion objective (which strives to cneure that all people have access to banking services); and how # meeting with the banks by the Minister (and Government) may undeemine Governmeat’s legisiation (capecially the financial sevior framework legislation); ‘whether this will set precedent for anyone else experiencing a problem with any bank; and, more importantly, whether such meeting may uniecmine the statement mada by the Deputy Ministor of Finaoce oa the offer made to im by significant wae of Oakbay, and whether this charge should not be investigated first, ‘As appears ftom the above issues, the request for advice arises in the context of urecent delegation by Cabinet of three members (the Minister of Labour, the Minister of ‘Mineral Resources, and the Minister af Finance) 10 engage number of magjor South ‘African commercial banks. ‘The stated intention, as reported in the media, is to “open constructive talks to find lasting a solution” after the elosare of bark accounts held by‘Oakbay Investmente, an entity owned by the Gupta family. 4. Welhaye been briefed with correspamdence between the Minister of Mineral Resources ‘and the Minister of Finance; a circular by the Ombndsman for Banking Services on the closure of bank accounts; and a 2011 National Treasury Policy document titled “A safer financial sector to serve South Africa better”. To the extent necessary we refer 10 some of these documents in the analysis below. 5. For the reasons set ont in the analysis which follows we advise that there is no legal basis om which Government may jaterfere in the banker-cijest relationship, the banks are required to honour theit confidentiality obligations to its current and former ‘customers, and afe therefre likely to respond, cotrectly, that they are precluded by law from answering questions the Ministers camy poses the moote mecting is likely to cause unintended consoquences and adverse perceptions regarding Goversment’s adherence to the relevant principles governing bankerclient relationships, internetional norms and best practice, Analysis 6. ‘The issues for advice mm om the correct legal firmewock governing benker-client relationships, and the powers of the Executive. We accordingly deal briefly with each ‘in turn before aidiressing the specific questions for advice, Banker-client rejetionships7. It is well-established, as oar instructions indeed recognise, that the banker-client relationship is govemed by the private law of contract.” Whether the contractual nature of the relationship is unique (ri generis), or one of mandanon (mandate) ~ of some ‘other specific contract is immaterial for prenent purposes? St waiTices thst the banker- client relationship is yovemned by the lew of contract. This does not, however, mean ‘hat public law and alatutory enactments do not itmpact om the contractual relationship. ‘They of course do.> But it docs mean that unless authorised to interfere with the cootctual relationship, third parties who intentionally intervene ia the banker-client relationship perpetrates a private lew wrong (a delice), which is actiousble* 8. tie an implied term in the contract between a bank and its customer that the bank is ‘under a duty not to disclose information concerning the customer’s effeirs.° This duty ‘is vat abgolute, however. A banker may disclose information about the afisirs of a ! Mocreto8 Banking Law ond Practit (LexisNexis, Dixban 2015) iss 12 at 15-1, * As regads the difixent coostict, 8 ag. Jouber: af a! (eds) The Law of South Africa 2° ed (LexisNesia, ‘Duran 2003) vel 2 part 1 at para 403; Moorcroft Banking Law and Practice (LesitNexis, Detbat 2035) is 31 Hisae. See EB. Pinto v FAB 2013 (1) NR 175 (HO) at pau 99 in which che Nembiea High Cours held thet dhe relevant provisions ofthe Nemibien Financial Intelligence Act und Prevention of Onganlied Crime Ac “soto be regard ‘teas ion by lew on hina Becht raenshp a nt coarse bon that exe btveen “Tai appli also after the srulnation of the contractal relationship, should the niererecce amount traxvagiog (erfmpoting) a contractual obiigation which would acherwise have expired (cf Neetbling otal Lew of Detci * ed (LexisNexis, Durban 2010) at 306). > Firastand Bank 114 v Chavesr Publications (Pry) Led 2008 (2) SA $92 (C) t para 20; GS George Comsattonts sand fansoents (Poy itd v Dataay Lu 1988 (3) SA 226 CW) a738D, not aflected iy this respect by Danscwt (Py) Led Cpmtinas (Pp) Lid 1991 (1) 8A 100 (A).tient under four circumstances Finat, where the bank acts under legal computsion, Second, where the bank is under # public duty io make the disclosure, “Thin, where the interests of the bank require disclosure, Fourth, whore the disclosure is made by the express or implied consent of the client. When a legal compulsion or public dary ssives is addesacd below in dealing with the third encillary iesve, 9. ‘Tho contrectual relationship may be terminated eilher by mutual agreement (between ‘the parties to the contract), or by ane party only (avting unilateralfy).’ Novetheless, contracts generally provide expresely fora unilateral right to cancel.* Accndingly the reference to “ortain allegedly unitatcral uctions™ is ~ to the exten that it implies thet the unilateral yature of the “actions” is a cause for concern af recourse — misconceived. The correct legal position, on the secent authority of the Supreme Court of Appesl (affirmed by the Constitutions! Court's dismissal of an attemgt to appeal the ‘rling) is explicitly that 2 bank may indeed unilaterally close a client's account.” * Feuer et af (es The Law of South Afton 240 (LexaNanie, Durban 2003} vol 2 gar 1 at pa 345. Sen, ton, iewee 6.1 the Code of Handog Practice, which eds tao mare instances (8h secoupt being in deft; anda cheque ‘uaving been veered to denen), Joubert eta (ede) The Law of South Africa 2~ed (LexisNexis, Duban 2003) vol 2 pert as pare 43. * Moorerof Banking Law and Practice (LexitNes, Pusha 2015} i 1 wt L520. $y the 20 Apel 2016 Tour by the Minister of Mineral Reaaurces, which wos dclivered anly two days later tothe Minister of Famone, 12 This is evidently 6 resrance 10 the closure of Oak's bank accounts, 1 Sredenbamp » Standard Bonk of SA Lid 2OIO(4YSA 468 (SCA) at pare 64 “This leaves for cousideraton the question whethes the Bank hd (i terms ofthe reli praseaty sought) good cause to clone the accounts Thp bank bad » vontas, which in vali Gat gave tthe sight eanoel, Stperetived tha the listing cfented repumsonsl and buaine risks, [caszarsedthow risk at peta lovel. 5 cme to »conchusiog. It excrelued it right of trcination in boas fide maze, fk wave the appellants ‘reenonable tine to take their business elsewhere, The termination did not offend any idenfiable enasttiond wise and wad tot atborvine cotray te aay vthe public policy conaldarsion. The bark 4d ot publicise the closure or the Teast forts decison. J: was tbe appellants who msde ther facts public by limching te proceedings and requiring te Bini o dsclooe the renaina”10. A bauik must, however, give reasonable notice of its intention to temminate a client's account.” But the right to terminate is not lost by failing to provide reasoaable prior notice ~ the termination of the account is merely delayed in the event of premamnre ‘purported claure.!? ‘This is because “a party to an ougoing contractos! relationship termipsbile on notice should never be denied the sight vo capect in zens of the coniact, especially when it porocives that the future of the relationship will not be in its interests." 11, Terminating the benkerclient relationship does not, however, terminate the bank's uty not to reves! information of a previous client 12. is by now well-estobliehed that the powers and dutict of ths National Executive are | govemed by the Constitution and nations legislation, Ministers, iz short, are entirely 5 “eteatures of statute”, as the logal principle is expressed. This means they have no inherent powers, only powers given to them by law. The principle of legality, which fs a crucial component of the rule of law (which itself, in tur, isa founding value of ‘the Constinution),’® provides that an organ of State has no power othet than that 32 We revert te this is addressing the sith ancillary ive. ' of Moacexoft Banking law atud Practice (LexisNexit, Durban 2015) i 11 at 15-31. “bid. ' Clause 6.1 the Code of Banking Practice; Joubert et af (eds) The Law of South Ajfica 2 ed (LexisNexis, ‘Durban 2003) vol 2 par ut para 403 fs 19. Section I(@) of he Constitution13. ie conferred by law.”” It requires Usat public power be exercised in good fuifh, and what Powers not be misconstrued or used for purposes other than imended,'* Altsough ancillary powers uot expressly provided way be inferred, this may only be Gone where this is necessary ty implication in ores to pive efficary to exprss powers, ‘The pusported exercive of powers by a member of the executive arm of goverment which is not authorized by law ig unlawfitl, end may be resisted by a private entity— ‘even without first sctting aside the purported exercise of public power,'? a. From the sbove the answer to the fundamental question is clear, It is @uat seve to the ‘exteat that thie js authorised by law no Cabinet member (at Cabinet collectively) bas any power to intervene in the bankerclient relationship. As a matier of public law any euch intervention is unlawfil and may be ignored by a private entity without seeking legal recourse. As ¢ maiter of private law any such interyention constitutes a delice,” which may result in a claim for damages ar other legal remedy (ike an intcrdict). Fadowre Life Asrurance Let v Greater Sohannesburg Transit! Metropolitan Counc 1999 {1} $A $74 (CCP expan 56. 1M President of te Republic of South Aftica v South Africa Rusby Football Unlon 2000(2) SA 1 (CC) at para 148. © Seo eg City of Tuhwane Metropoiian Munfelnaiy v Cable City Py) Led 2010 (3) SA 589 (SCA) at peru 145 City of Cape Town v Helderberg Park Development (Pay) Lrd 2008 (6) SA J2 (SCA) at para 50, 2% Neoting or a} Law of Deics * of (LaxiaNewls, Dmban 2010) xt 306,16. Whether a legal basis for intervention by Cabinet members exists is considered in addressing some of the additional ismues identified in our inswructions (pasticularly the furth), to which we now turn. is of! 17, Banks do not only have & contractual entitlement, but also a legal obligation to choose ‘heir customers carefully. It isa continuing duty, and baniks* right to protect their own reputation has been recognised as @ valid basis For texminating the banker-elieut reletioaship.”" 18 ‘The Basel Commistee ou Banking Supervision ot the Rank of Intemational Setlements ‘considers that “the first and most important safeguard agninst ntoney-laundering is the integrity of banks’ own managements and their vigilant determination tu prevent their instiuutions becoming associated with criminals or being used 9s a channel for money laundering” The Commitice recognises as an essential part of banks’ risk management practices the adoption of effective know-your-castomer (KYC) standards, Proper KYC policies and practices “not only contribute to a bank's overall safety and soundness”, but also “protect the integrity of the banking system by reducing the likelihood of bunks becoming vehicles for money-laundering, terrorist financing and 1 Bredenkamp v Standard Bank of $A Ltd 2019 (8) SA 468 (SCA) at pets 17-19, holding het “veptistion isnot aeccsoarty based on Tay, bu often om perception.” 2 Preveation of criminal use ofthe banking syter for dhe purpose of money-laundering (December 1988) serdlable at pene bis ogepubUbehac! 7 a.1, 10 other untawful activities." In practice barks give effect to their KYC obligation by adopting client-acceptancrs. policies. These include inter alia minimum standards for establishing and tenninating banker-client relationships, These policies generally apply # risk-based approach which focuses on clients with high risk profiles, es indicated by factors like the identity and chetecteristics of the clieat; country of origin: the banking product ‘wsed: and dhe delivery chasmel for the business which is being comducted* Exeruples of fuctons which increases reputational risk to abaricincinde any business involyernent on the pert of the client in arms trading; hunum rights ebuses; errviroamenta] damage ‘orpollution; undemocratic political regimes.”* An important high risk factar is political exposure, So-called “politically exposed persons" (PEPs)”” are per se high-risk ccustomers.™* Vander South African law these principles are given elect to by the Financial Intelligence Centre Act 38 of 2001 (FICA). It imposes a duty on am accountable institution to identify and verify new and existing customers, to keep records of certain ‘infomation, and to report certain transnctinas and situations. This reporting duty po, % Mogrerof Ranting Law and Practice (Lexishexi, Durban 2015) is 17 at ut, 41an53, pid. 7 Peps are individ who ere uc wba have bora entrusted with pramincat public ition, much ax bande of tate; ection polticias; setior goveraient, judicial or military offal; senior exceatves of public npauisations; and polidet party oficial (id & 9} seportnt 3 Mooreroft Banking Law and Practice (LexisNexis, Durban 2015) iss 11 at $5.21. uN overrides 1 bank's duty of confidentiality towards is client. But the duty ig to report to the Financial fatelligenoe Contec — nat tp Cabinet. ‘Thus. the duty under FICA js for ‘Danks to know their clients (which implies an entitlement to terminate a banker-client relasionship when repulational risks arise), but banks have no right or duty to keep Cabinet in the know of their elients' (or their own) affairs. ‘To this the Banks Act adds further duties to guard agninst banks heing misused for Purposes of market abuse.*? The Banks Act imposes certain reporting duties on banks. ‘Again the duty in not to report to the National Executive, of any Cabinet member, The ‘Bunks Act designstes Wie Registrar of Banks asthe only authority to whom information rust be furnished under the Act.*” The Registrar may under certain circumstances disclose information reported to him to third parties.** The Ranks Act contemplates (hat should there be any concerns regarding the banking sector this be comorunicated ‘by the Registrar to inter adios the Minister. 2 Section 60A of tae Banks Act. ection 7 of te Banks Act 2 Section 90 of tie Banks Act provides “Notwitistanding the provisioas of ection 23 (2) of the South Atican Reverte Bank Act, 1989 (Act “Ne. $0 of 1988), the Regina mary Suni iermation aequired by him or ber 98 contraplatd i Uat section ~ G@) ‘way geeton charged with de perormance ofa function under any law, provied the Regisrar is satied thet possession of euch information by that person is stent Tor the proper ecformance of such fetion by thas parsons 0) oan authori in wcoatiry ur than tbe Republic forthe purpose of encbling such muhorty to perfor functions, corresponding to chose of the Registrar under the Act, in respect ofr Bank ‘carrying on basine it sue other cous Provided tht the Regirar ie sateied tht the reciplent of the fformation so provided is wing and able {o keep the information confidenta! within the confines of the lacs applicable to the redipent™ * Section PO(2) provides ‘The Registrar must fform the Minister axe! de Governor of the South Attican Reserve Bank of any ‘mater is in the opinion of the Registrar may pose significant risk to the banking sector, tbe ecozomy, financial stability or financial murket8 more peneraly.”2 2B. 24, 2 It ig therefore not cousistent With the scheme of the Banks Act or FICA to confer a power on the Minister to extrict confidential information from banks. ‘ur iostructions identify serious concems regarding compliance with Financial Action ‘Task Fores (FAFT) criteria, and the consequences of non-compliance. Within the Scuth African regulatory regime these are addressed by the Reserve Bank's Directive ‘far Conduct within the National Payment System in respect of the Financial Action ‘Task Force Recommendations for Electronic Fund Transfers, and other measures supported by the Reserve Bank. What these measures essentially require is compliance with KYC principles,” to which we have already referred, I's accordingly important that South African commercial banks be permitted 10 apply nations] and international best practice in order to choose their clients, know their clients, classify the risk to which their clients expose them, and decide whether their business and repulational risks exposure justifies terminating a epecilic bankr-clieat relationship. Should Goverment wrongfully interfere with the exercise of banks’ powers and duties, Government may incur detictaal Viability for aay penalty imposed on 2 banks which is causally cornected to Goverment’ conduet. Mooreraft Banking Law and Practice (LexisNexis, Durban 201S) ita {1 at 8-14,3 25. Accordingly Goverment intervention may expose tiie financial sector and ‘Goverment self to Tegal risks, nfompetion Act 26. ‘The statutory exceptions to a benk’s duty of confidentislity are generally considesed™ to comprise those contained in (i) section 236(4) of the Criminal Procedure Act $1 of 19: (section 31 of the Civil Proceedings Evidence Act 25 of 1965;% (i) section 78(13) of the Attomeys Act 53 of 1979; (iv) section 33 of the South African Reserve Bank Act 90 of 1989; (¥) section 74A of the Income Tex Act 58 of 1962, (vi) seetion 87(2) of the Bunks Act 94-0f 1990;1° % See.e.g, Tones et.al Introduction to Sowth Afitcan Banting and Credit Law (Lenisiexis, Durban 2006) at 6 fu 32, 34; Joubert etal (ede) The Law of Soush Africa 2 ed (LexisNexis, Dutban 2003) vol 2 yar 1 x para 345 & provision eplis to orimina proosedings. It is accordingly of no application in the reset circumstances, 5 This sctien proves tha "Tao ark shall be compelled o produce fs Hepes, 6 books, cadhbooks or ober sccguat books in any civil peoceedings ules the pert presiding at uch proceedings orders thet they shel be so produced." 1: accordingly dee ot apply. "Tus provision easy dct not apply, beouse Oaibay is a an tory, its scoot i tw ts aeeruat, and theres no requet for infomation regard the acount by any law soci). "Thia provision deei6 withthe preservation of seecey io elation to the busines of the Regrve Basic il Although on exception ext in relaton to information provided to the Mls, the operon of this exception is lined t fetormation she Raverve Bank, «shareholder ofthe Reserve Bank, ofa cleat of he Reserve Bak. 2 Ts provision bus been repealed bythe Tex Adininisttien Act 28 of 2011 © "his rovsin deal with hushance of wives who tre depositors. (i accordingly entirely ielevent to the current Sivation. Section 89(2) ofthe Banks Acts also not relevat bocause it auhorses te Reiss of Banks {o finish infomation obeined purcast 19 section 33 of the Souls African Reserve Bank Act 10 anther ‘oactionary if he information i easetial to the prope performance of tt person's felon“ (vii) section 37 of the Financial Intelligence Centre Act 38 of 2002;4" sections 64(1) and 65 of the Access to Laformation Act 2 of 2000; and section 69 of the National Credit Act 34 of 2005. 27, Whether and to what extent these (und similar) provisions authorise an exception 10 the ordinary principle of banker-client confidentislity depends on the particular facts and circumstances in which the question arises. Save whese & statutory exception properly applies, banks’ commen law contrastual duty as amplified by the constiturionel duty to obvcrve its client’s privacy protected by section 14 of the Constitution prevails. ‘Cabinet members may not approach banks to disclose information by usurping powers of other fimetionacies, and may not purport to use (whether directly or indirectly) powers conferred for specific purposes for extranoous purposes — however well invended.“* 28, The nature, purpose and scope of the Protection of Personal information Act 4 of 2013 ‘This provision excludes the duty of seerey or confdentality a any other reStiction on the disclosure of indumtion (whether imposed by legion or arising from the canton law or agreement 10 the extent ast uc diy or reezicon ativs couplince by tn texouatable inettation, superitary body reporting insitaien, the South Aftican Revenue Service or anyother person with a provision of Par 4 and Chapter 4 of this Act, The Act primarily requtes that information be reported to the Cenire, sad ealy in some instances that information be ‘gported to a person designated by to Minis. ‘2 "This Act does not apply in see circumstances, because there has Been no request for a record. 1 Ta goin impose ty rp dei epdingwercme setf eaone mie to neredit buest © Cynvealgting Directorate: Serious Econgmic Offences» Hyundat Motor Dlertbvios (Py) Lad: lee Hip Motor Disettors (Pp) La v Soi NO 2001 {1} SA $45 (CC) at gare 15-18. © Universiy: of Cape Town » Miaisers Of Education and Culrre (Fouse of Assembly and House of ‘oprasentarives) 1988 (3) SA'203 (C) 31212; Yon Eck NO and Van Rensburg NO v Etra Stores 1947 (2) 8A 984 (43, applied in inter ac Gauteng Gambling Board v MEC fer Beonomc Deveopment, Gaxteng 201% (5) 5A 24 (SCA) at para a6.29. 15 sender it highly questionable whether a power to disseminate to the Minister of Finance information which is not otherwise lisble be to dissernination to bim (under iegistetion governing the financial sector) can be constroed in the vurrem circumstances.“ Altiough certain provisions of tae Act are capsble of a construction which could in censin circumstances authorise the dissemination of information to the Minister, ‘provisions like section $7 restrict such construction ot operation (atleast to the extent thet, far instance, prior authorisation bas not been obtained from the Regulater, to the ‘extant that this may be necessary). ‘However, on the basis of the information convained in our brief it is not possible to provide any conclusive view on thc application of the Promotion of Personal Information Act in the circumstances of this case or mose generally. The considerations 10 which we next tum moreover militate considerably against any Positive answer. “As seation 2 records, be punpose ofthe Act is to @) ge efext the consitcoal sight to privacy, by wefeguerding peeyanal infornadon when ‘roceasod by» responsible party, subject 1 juaifiable rstatons tba are aimed at @ balancing the right to privacy agtinst other right, particularly the right of sovess fo ‘formas; and 1) protesting important interests, inchiding the fice Dow of internation within :ne Republic and across iterotical borders (©) regulate tne raaanes in which persoul inforation may be zrocessd, by extihing conditions, in huxmony with latemationl landed, dat prescribe the miniwor threshold seauements for ‘he in proceing of personal informasion, (©) provide perams with rights end cemedies (0 protect their personal information from processing that is wot in accordace with this Act: end ©) ssiblish vohmtary and compulsory meestces icinding he eaabishenent of an tnferraon Regulator, to enrure respent for and to promots, enforce ad fui the righis protected by iis a30. a 16 ef client relatio It is precisely because the overall political responsibility for the banking sector tests with the Minister,” and because the Banks Act is a particularly important component of the statutory scheme goveming banks, thet any ministerial power to obtain information would have been expected to have been provided for in the Banks Act iteolf, The Act does nat, however contaiu any specific provision which empowers the ‘Ministes to obtain Saformation directly from a bank regarding its client. ‘Unsurprisingly the Act also does not contain any provision which contemplates that any oversight responsibility or power the Minister may have under the Act is somehow to be exercised together with the Minister of Labour and the Minister of Mineral, Resources. Nor docs the Act contemplate that Iebour matters or the state ofthe tinea sector may justify the Minister in exercising any power conferred on him by the Act iwelf, Were the Minister to exercise any such power by taking into account considerations other than those relevant to the banking sector or the dictates of uunsnthorised third parties (which may include other Cabinet members), his conduct would be ultra vires the Benks Act, unlawful, and liable to be ignored by any of the Danks with impunity and set aside by a court should the maticr become litigious, * Moorenaft Boning Lav and Préctice (LexisNexis, Dorbas 2015) its 12 272-8 SS7 32. The Ombudsman for Banking Services has jurisdiction over complaints filling under the Code of Barking Practice."® This Code applies to personal and small business customers. A small tusiness is one with a tumover of leas than R10 million per year.”* We have not been instructed as regards Oakbay’s annul tumover. Should it be more (Gan R10 000 000 per annum (as we suspect), or should any claim which might arise exceed R? 000-000, the jurisdiction of the Ombudsman is excluded on this basis alone. Other factors may also either exclude the Orabudsman’s jurisdiction,” or render it premature (0 exercise any jurisdiction which the Ombudsman may otherwise have haa 33. Hh nccordingly appears to us that the cemit of the Ombudsman for Banking Services does not inclads the Oakhay matter. 7 able 34. The Code of Banking Practice recognises a bank's right to close a customer's account, 2 Mocreroft Bemking Law and Practice (LexisNexis, Durban 2015) is 11 st 13-4, * Cfihe website ofthe Ombudsmen for Banking t wrw.obsst.co.a, cited ia Mocrevot Barking Lew ard Practice ‘LexisNexis, Durban 2015) in 11 at 3-4 (which refers to «threshold amouat of RS 000 OOM). See, however, Tie Ombudsman jor Banking Service Handbook (Sut, Cape Town 2013) at 7, relerring to a business Tarnowee whic exceeds RIO milion per anaum vs factor which excludes jrisdiction. See too id et 8 £9 2, explaining that the 25 000 000 threshold as increased 9 R40 G00 000 we, € 31 May 2011, 2 fg, ide dispute concerns the exercine ofthe bank's commercial judgment, $1 Eg. a fallre to exhaust inceynal complain processes wich the pariclar bunk concerned,35. 36. 18, and provides that this must generully fellow “teasonshle prior notice” The Code docs not state whut a reasonable period is. It does, however, recognise circumstances in Which an account may be Closed by a bank without any prior notice. The legal position is that what constituics reasonable notice depends on the circumstances ofa particular cass, In the context of closing bank acconnte the character of the account and any additional special facts are relevant considerations to be taken into account’ The Ombudsman for Ranking Services bax confirmed in 1 sineslated ‘bulletin on closing bonk accounts thet whet constitutes a reasonable notice period will ‘depend on the merits of each particular case. Generally, however, « period of between ‘one and two months would be considered reasonable in respect of av individual ‘ctount, aad two to three months for businens accounts, This depends on the nature of the accounts and the pumber and nature of transactions on the accou. The above periods ae longer than the one-month period applicable under the equivalent code in the United Kingdom.‘ “They inve been increased to wSland cliemts sufficient time 19 change banks and transfer debit andere.°? 7 Clanse 73. of the Code, Claose 73.3, which refers co intences where (i) « pank ix compelled to chose wx account by lator ksterntional beat practic; (i) « customer bave nod vs6d un secount fir «sigificant pevied of tims aad (li) Chere Is ronson to Detiave thatthe accoeat ie being used for any illegal + Prosperity Lad Lloyds Bank Lid (1923) 39 TLR 372, #1 Haygood Paget's Lew of Banking 138 ed (LexisNoxi, Landon 2007) at 153, referring to Clause 7.3 of the UK ‘Beaking Code. Ombudssian for Banking Bellen no. (35 Angus 2012) ep 4.37. 9 In the absence of specific fuctuel matructions bearing on the ismc, it accordingly ‘oppeats thatthe default reasonable notice period is two to three months, untegislared) finmncial incision objective 38, 39. AS we understand it, this question probes whether banks’ duties to assess risks and ‘guard against them (in the interest of banks, their other customers, and a sustainable financial sector) conflict with Government's goal of schieving universal inclusion in the banking system.” ‘We do mot perecive a real tension berwoen these duties and the stated objective, This ‘4s because unqualified and universal access to banking services camiot be a legitimate povernmental objective to be purmed at the expense of vulnerable bank users. It is for ‘this reasom that the national and international legal infrastructure goveruiag banking presupposes that the financial system indeed be protected against (and, if ucomsssry, closed {0} certain individuals, cuttiew and their transactions. ‘The result is that a legal ‘obligation is imposed on banks to manage risk profiles, and banks have a legal entitlement to terminate a banker-client relationship when in their assesement the Telationship exposes the bank to reputational and business risk. ° Our instrvetions formule this ive se forming pert of the sixth isn, but we adrees i parte as «sovcath ‘sue,40. al a2, It is the unlegislated Government objective of an all-inclusive benking xystem which hhas no Tegal status, However desimble wn ell-isclusive syotem might otherwise be, a ‘Govvesnment objective with no legal force cannot detract from pre-existing legal rights nd duties which aré consistent with intemational norms, This is because commen iaw sand statutory rights end duties are ofa higher Jegal status tian Government polivies.®® ‘There is, moreover, a binding precedent Sar the \epel principle that client cannot be imposed wpon a bank merely because the clit might otherwise bo rendered without a benk In Bredentamp the Supreme Court of Appeal held that any such imposition ‘would be unfhir, and was not supported by eny constitutional imperative ar public policy consideration. Accordingly the objective of achieving « banking sector which Jeeves no one without a baok cannot dilute banks® legal duties or divested them of vested rights. Otherwise the banking scotor will be rendered unsustainable, which would be counterproductive. Eights additonsl ise: lmolicatons of ministerial weeting 43. For the reasons set out sbove, the mooted ministerial meeting is not authorised by Jegislation governing the financial sector. To the extent it seeks to extract information or an explanation which is not pennitted, it would be unlawful and woeaforceable. % shart Garden Routé (Pry) Lid v Pinnacle Paint Casino (Pry) Led 2001 (4) SA 501 (SCA) u pera 7, 2 eden Sard Bank of af 21008) SA 468 (SCA). idol paras45. 2 ‘Meeting with the banks may undermine Government's or the Minister's authority if ‘either of them is seen to make demands which cannot be enforced, If the banks nonetheless yield to what tbey may otherwise bave regarded as an abmse of public power, then itmay indeed set ert adverse “precedent” — as our instructions put it. We nse the word in inverted commas, because an tct of exceeding public power cannot create what ia law constitutes a precedent Even if de facto permitted, it st reaning de lege an illegality without amy precedential effect. But it may nonetheless, fn the sense contemplated colloquially, set an adverse climate az regards what the financial and other sectors are expected to tolerate. Such conduct muay indeed have very adverse national and iatemational consequences. Rut these are not for us to identify or quantify. Finally, it does appear to us that Goverment exposes itself to exiticism of inconsistent conduct if it were to meet with tanks despite the Deputy Minister of Finance's statement remaining untddreased.’ 12 i1 1s conect thet significant owners of Oakbay ‘prttented themsciver ts poople with power to offer ministerial poritions, then they qualify as PEPs. In chat event Banks’ perception that Oakbay presents business and 6° The relewart pert of the tateanent 0 which we uoderstand our instctions ter is pare 6 of the media staerment ‘9f 16 March 2016 issued by doe Ministry of Finance, Tt reads “Therefore ie me tate the facts tm the matter of whether C vas apgroochod by nongovertenta Indivtoals in respect of the position of Minstec of Finmace. Membre of the Gupta fly offerte the positon of Minister of Finayce to eeplacethen-Ministr None. I rejeic this out of hand, The basis of my rejection of thir offer is tbo it ranks a mockery of bur hard carued demacrecy, the tie of our people ‘nd fo one apart from the Prozident of the Rezublic eppointé rinistr. Let te alo ple ito record that thc wat oan Derwent Depa Seeetry Gene of ANC Ma exe Dated elt thls mate”repuiational risks to themselves and 10 theit other customers cannot be socond- guessed, especially not by Government. But Government might, if it is perceived (ven if wrongly so) to meet with banks at the instance of Oukbay’s owners, create uniftended cousequences. In the current context® and a climmte™ perception is important. ‘Cougiusion 46. For the seasons set cut above we conclude that the contemplated meeting is not authorised by law, and that its potentinl adverse consequences should be seriously ‘considered and mitigated by appropriate public statements before and after the mecting— were the meeting nevertheless to proceed (despite our xévice to the contrary). We advise accordingly. JJ. GAUNTLETT SC FB, PELSER Chambers Cope Town 25 April 2016 As the Supreime Cour of Appeat held in Bredenkomp v Standard Bank of SA Lid 2010 (4) SA 468 (SCA) at para 65, iis nof even “fora eourtto assess whether of not x Bona fide business decition, whic is onthe fece of reasonable and rational, was objectively ‘wrung’ where in fc cumstances no public poly considerations ere © Bradenkamp v Standord Bork of S¢ Led 2010.4) $A 468 (SCA) at pare 19. + Zeowomic Freedom Nighters vSpeaker of the Nacional Assembly: Demeratic Aliance v Speaker ofthe National Assenebly (CCV 143/18, CCT 1711S) [2016] ZACC 1] (81 March 2016) arpa 8.a a MINISTER: FINANCE REPUBUG OF SOUTH AFRICA nate Bag X196, Prete, 00%, fo. o2 42 829 RON, Fant (2a 3260 "PO Box 29, Cape Tou, BOOD, ja. #27 24 484 6900, Ear 927 21463 2698 Mr Nazeem Howa Chief Executive Officer Oakbay investments 144 Katherine Street SANDTON 2031 Dear Mr Howe MEETING ON CLOSING OF OAKBAY BANK ACCOUNTS: 24 MAY 2016 ‘Thank you for meeting with me this moming, together with some of my offiisis. The meeting was in response to your letters daled 6 and 17 April 20168 to discuss the recent closure of certain Oakbay bank accounts, ‘We informed you that banks operate in a highly-regutated environment, and a range of factors couki gle res te @ bank's decision to close an acount | alfch an information document outlining the regulatory framework governing the banking sector and financial ‘sector. Mare information is also available on our Website (www.tressury,qov.za) and several international websites, like www, bis.org and www fatf.com, We relteratad that there are legal impediments to any registered bank discussing client related matters with the Minister of Finance, or any third-party. Further, the Minister of Finance cannot ect in any way thet undermines the regulatory euthertos, twos evident thet you have not, a8 yet, exhausted al legal remedies, including approaching ‘the court for appropriate relief. It was also pointed out that an application to court can also ‘be in the publis imerest and help to strengthen the current regulatory regime in order to serve customers better. We agreed to continue engaging and you would provide us wilh any relevant information. In conclusion, we pointed out that the recent altacks on the integrity of the National Treseury fare not helpful or in the national inlerest and should be avoided. Yours sincerely fhe PRAVIN J GORDHAN, MP MINISTER OF FINANCE Date: 24.05 - 2016Aide Memoirs Background 4. This note eriées from 2 letters & and 17 Apr! 2026 Oakbay addressed to the Minister of igs ond bras na +2. The aim of the meeting wes to clartly and expicin the ‘earvewark ; ted wat cami ald caanct be dane by ek ond donne oe repulstory Fremework, 3. We wish to state emphattenlly chet we will cartettate in whatever legally netrseabie wit (poreibia to suve thejobs of workers. a eg arn econ carmen) avs Sah ry framework surmarised below, ‘OVERVIEW OF FINANCIAL REGULATORY FRAMEWORK FOR BANKS IN SOUTH AFRICA Overview Domestic banks are not only regulated by domesticely, but also by averseas regulators n countries where such financtal insttutlons have w presence or trensact with other financia} Institutions based Jn that country, For this reesom, financial toatitutions are regulated in terms of tough frtemnatlonal standards fike Base| {| andi Financial Action Task Farce {FATF) recommendations on antiamoney laundering and combeting of financing of terrorism (enth-nonay teundering and counterfinancing ‘arvorism), the latter endorsed by more then 180 countries. Felhire t2 authere to these standards. ‘would lead te out banks to being excluded fram the piobel financial and paryments system, which In ‘urn will signficantly reduces ecanomle growth and result nthe loss oF many Jobs. For example, More ‘than a millon jobs were last in 2008 as a reguit of @ bank fellure dn the USA. 1 le essential that South Africa's financial system remains part of the global fewencsl system. Belng ‘part af the globel financial system faciitates: ‘Salling of government bonds to fund the budget deficit and infrastructure Funding of the country’s current aecount deficit Forelen dizect investment, and the generation of fobs Trade, both Imports and exports, Including financing for such trede, Accers to Blobal payments system, which enables payments for Imports end exports, ppurcirasing poods and serves on-line, and being able to use your oredit cards overseas ‘© Insurance and remittances. ‘The Implications of belng excluded from global markets would be catastrephic, with long term aructurat effects. Such en adhverse Impact can tbe snen in countries, euch ae the ihre Repub of ‘ran, whieh have been at the recelving end of sanctions impased by Jutisction® lke the USA and EU. Cabinet has since the 2008 Global Finencia! Crisis adupted numerous decisions (all available on _vewsn poeta 2s part of post-Cabinet media statements) intended to pratect the Integrity of the South ‘Afsioan frandial eystarn and introduce measures t0 maka it safer and serve SA better, Cabinet hat ‘noted thet Its In South Afrcy’s best natlonol interests te ensure that the domestfe financial sectorregulated sccording to International standards in order to promote economic growt and reduce the «sk to the national fiscus. Jn addition to prudential and anti-money laundering and counter terrorism standards, harks are also ‘wspectad to comply with market conduct standards, including tresting customers far, and ahemsative depute resolution through the ombud system. In addition, tt wes noted that ore 35 depesit-taking banks, of which 27 are locally incorporated. ‘Aside from the four or five banks nemed by Gakbay, 118 not clear whether Dakbay hws exheusted its all ts options and applied to the ether registered benks for banking facies. 2. How is compliance monitored at an intornational level? In oreer to ensure the consistent implementation of agreed international standards by all countries, all cguntriés subject themselves to 9 number of atsessments and peer reviews. These inclide, for ‘example, revinws by the G20 on its members {through the Financial Stability Board and IMF's FSAP) land the FATF’s Mutual Evaluation assessment process. The Intensity of these reviews has bean incregsed following the global Financlal crisis, with 62D countries aod other rasjor aconornies being ‘evaluated more often under a revised more stringent methedulogy. Jnternational banking stenderds prevent a country’s government fom Intarvening In the operations ‘of a bank, for exemple obliging @ bank totake on a cutter who may pose risk to the bank. Such an Intervention will expose South Arica te # negative eer review for undermining ts own laws, end for Interfering with the operational independence of financial Institutions. Further, taxpsyer funds wt bie liable for any darinage suffered by banks for accepting such high +t chests, 2. What could be the consequence of South African banks not compiying? Fallare to comply with standards tke base! mi and FATE standards exposes m zeuintry to ponikive ‘messures from overseas regulators, South African financial instfutlons may also lose or be refused ‘correspondent banking relations with other foreign banks if they ere of the View that they operate ‘hy 0 eFe fot subjected to, a regulatory environment which Is not recognised at edequete In the ‘ight against money laundering and terrorism finance, One of the key principles im all the efferant stanidarls that apply to the fang) sectors that of the pperatiomal independence of remulators and supervisors. Im 2034, the 620 (uhrough the Financial Stability Board) agreed on & common toolkit availble to ‘ovatseas superviors ta deal with countries deemed to be “non cooperative jurisdictions’. The FibencalStablty 2gard describes in ts report: "ait ist of measutes that could be taken ofter « [urisdlction ix thted 0s non-cooperathe, to safeguard the globol financial system and to opply addlttonal pressure to improve the jursdictians odherence” “These messures, as applied by oversees regulstor to thelr banks, include: 1) Preventing South Wiican tans from doing business wath forelen banks, #) Banks will have increased regulatory requirements Impased of them by overseas regulators;'W}_taternational banks will be banned from doing business in South Africa; and 4) Increased audit requirements. In edition to these messures, most jurisdictions commonly mpage massive fines for specific ‘contraventions and for lapses in anti-money taundaring and counterfinencing terrorism regulatary ‘ules by thet financial institutions. Such fines can be high, as cin be seen by the $8.9 bilion fine Imposed on BNP Paribas by US Authorftes, and could by themselves generate a financial erst tn & smialler economy lke ours. $A banks have recently been fined lesser fines by UK end other authorities. Cabinet has spproved the strengthening of current anti (t will be recalled thst the first letier attributed the butik’ devision to close Oxkbuy's accounts to “an anti-competitive ani politically motivated campaign’®* waged “agninst. ‘the Gupts famity"3! The suggestion wes that improper political pressure would have 2 paca T ay. “What on aftcted easomess {0 onthe fouth page of he alde memotre, 2 Para 2 of Oskbay's CO's eter dated 24 Mey 2016 to the Minister. ® Darn 3 of Cnkbay’s CEO's late dsed 24 My 2016 to the Minis. 2 Prt 3 of Oncbay's CEO's ober iad 24 My 2016 tothe Minisic= 2 Pam 4 of Oakbey's CEO's ker dated 24 May 2016 tothe Minister. 2% Pera of Oakby’s CBOs let dled 24 May 2016 ta ths Minis. 2 Pur of Osicbay's CEO's ler dae 24 May 2016 tthe Mtr. 2 Bara’ of Onkbay’s CEO's eter dete 24 May 2016 to the Minister. > Dore? ef Gakhay's CEO's ltr dated 17 April 2016 0 the Minis. 8 Park 2 of Onthay's CEO's letter date 17 April 2016 tn do Minin.1. u. ‘buen remedied by (he resignation of the Gupta family as shareholder, not that the remedy is o apply political pressure in the opposite direction.) The [eter stots vaguely that Oakbay hes “exhausted all options”, but docs not identify whether bad sougbt ‘to open an account with any of the other fivanciel institutions t which the aide memoire refers. ‘Unimately, what the comespondence reflects is that Oakbay's request po the Minister is tor him to exereise a political yower pursuant to Govemment policy reflected in clause 5 of the aide memoire — there being, as Oskbay appareutly acknowledges, no legal basis for the Minister to intervene, ‘The pressure sought to be brought to bear upon the Minister is the livelihoods of now 7 500 Oakbay employees (previously the umber was 4 500) boing “placed at risk through decisions [by the banks] which seems [sic] to bave been taken without any due process around compliance”. Quite whut is meant by the latter phrase is not made clean, st does however sugesst a legal cause of action: the fack of “due process”, This is not consistent with the legal advice ‘Oekbay tins disclosed it has received: thet Oakbay has no legal recourse against the banks. (2) The questions for advice In our previous opinion we have dealt with banks’ contraetual power to terminate the % Para 10 of Oakbay's CEO's letter ested 24 May 2016 tothe Miniter. * Paca7 af Oakbay’s CEO's leterdased 17 April 2016 ta the Mizister. Part 11 of Oakbay’s CFO's leer dated 24 May 2016 (othe Miniter,banker-client relationship; the duty of banks not to disclose information of a previous client; and the Minister’s power conferred by statute. We explained that without 6 statutory power to do fo, the Minister has no legal authority to intervene. Conversely bois under acommon-law duty nos to interfere with the banker-client relationship, Wes sefer to the legal framework set out in the previous opinion and do not repeat it here. (@) First question: Are banks legally obliged to provide Oatisay with reasons for closing Oakbay's accounts? 12 The duty to provide reasons for condiict is one imposed by administrative law on a public authority exercising public power.” A commercial bank's closing of its customer's account is not governed by administrative law. Accordingly there is no legal obligation to provide reasons Yor closing an avcount>? Nor is any such entitheracnt or duty created hiy the Code of Banking Practice.” [t also does not appear ‘that any each contractual entitlement has been agreed by Oakbay with any of its ‘exstsihile bankers, otherwise Oakbay would not have stated in its letter to the Minister ‘hat it has been advised that it has no susteinable legal cause of action.” +" Section 33(2) of the Constinition; section $(1) of the Promotion of Administrative Justice Act 3 of 2000. * Although the Supreme Court of Appeal recorded in Sredeakamp ¥ Standard Bark of $4 Lxd 2049 (6) SA 468. (SCA) at para $5 the appeftent’s contention that “the banking industry is in the hands of few who enjoy significant market power. {tie accordingly a case ‘where private power approximetes publie power or has a wide and public dinpace”, It di not upnold the argument ~rejotng is by implication. Significantly in Bredentamp v Standard Bank of SA Ltd 2010 (4) SA 468 (SCA) at pare 64 the Supreme Court ‘of Appeal appeared to have inplied thet in order for any duty to existon albenk ta the effict thet an account may tly be closed ou good cztse chown thir woud require a contractual ‘erm ore developaeat ofthe comm aw. 8 Clanse 7.3.2 of the Code of Banking Practice merely provides that a bank “will not close (8 customer's] account wishour giving [the cxtomer reasonable prior natce” * Paras 3-4 of of Oakbay's CHO's letter dated 24 May 2016 to the Minister,3B. 14 16, Accordingly there is no legal obligation on the banks to provide Oakbay with reasons. But even were it otherwise, the remedy is one only capable of being exercised Dy Oakbay itself as the answerto the second question (i which we now tuna} confinns, ) Second quesiion: May the Minister approack the banks to request reasons for closing Oakbay’s accounts, and would the banks be obliged to comply with the request by the Minister if Oakhay waives is right to confidentiality? ‘The cficnt-banker relationship vests a duty in the bank %0 hosoat the confidentislity of the client's information, and it imposes a duty on the bank to hemour this duty. Accordingly # slient may isleod waive its right to confidentiality.” ‘The onus of proving a waiver is on the person who raises it, That party must demonstrate that the right-bearer, inthis case Oakbay, with full knowledge of is right, decided to ahandon it, whether expressly or by conduct plainly inconsistent with an intention to enforce i" Accordingly, should the Minister rely on a waiver, be would: bear the onus. A waiver is not lightly presumed. Non# of the letters to the Minister contains anything which is compatible with an inference of waiver. ‘Thus, ai a factual level the first question cannot be resolved om 2 basis which Clause 6.1 the Code of Banking Practice; Joubert et at (eds) The Law of Soush Africa 2° el (LexisNexis, ‘Durban 2003) vol 2 part | sf para 245. 41 Boratlap v Spangenberg 1974 3) 8A 695 (A) at 704%,17. 18, 19. 8 circumvents the Minister's general duty not to interfere in the banker-client relationship, which survives any termination of the contract between Oakbay and its banks. Only were Oakhay subsequently to waive its right to confidentiality does the ‘Tegel question as regards the Minister's legal authority and banks” legal entitlements arise. ‘As regards banks" legal entitlements, should Oxkbay waive its right to confidentiality, ‘bank wonld not be able to invoke ita its owm instance to refuse to disclose otherwise confidential information. This is because the confidentiality is that of # client, not a bank. Once the right is waived a bank has no duty to observe confidentiality, and it ia any event never had any right to resist disclosure: only a duty to de so (forns Jong a8 confidentiality subsists). But the cosmect question is aot whether the banks can invoke a waived right to confidemiality. Ttis whether the Minister has (ae power to request (oformation in the ‘Dit place — whether of not the information is subject wo confidentiality or vot, This is Decanse the Minister only lias such powers as ure conferrud on him by law. As our previous opinion identified, it is the Benks Act which would have authorised the “Minister to obtain information from banks. But this Act does not authorise this. It authorises the Registrar of Banks as the only authority to whom information must be furnished under the Act. Accordingly whether or not Onkbay waives it right to confidential information (whichn it hag noi yer done), the Minister is not empowered to approach the banks to obtain information repanting Oakbay, On that basis alone banks are entitled (o refuse any request by the Minister to obtain information, including banks’ reasons for closing Oakbay’s accounts. (©) Third question Does the current regulatory system provide a mechanism ‘through which the Minister can intervene of the instance of Oakbery? 20. For the reasons set ont in our previous opinion and repeated in answering the second question, the regulatory system does not provide any mechanism through which the Minister may intervene. The Minister's powers, we repeat, are not inherent; they are ‘ianited 0 such powers as are conferred on him by statu. No statutory provision gives, ‘hita the power to call upon a bank to provide the information which Oakhay wants, ‘Dakbay’s reliance on the reference tn “gaverament policy on banking” in paragraph of thw aide memoireis misconcsived. Policy— especially a reference suchas this 10 policy {nits broadest sense —confers.ro power such aa Oakbay contemplates.” (Iemay further be noted that in invoking paragraph $ of the aidde memoire, Oakbay clides the epexific qualification: “but this docs not apply to non-complying customers.”) ™ Akant Garden Route (Pry) Lad v Pinmocle Point Cusine (Pry) Lid 2001 (4) SA $01 (SCA) at para 7 “The wot poo” ihren vege end may bear cieren: mcainge. .. T prefer to begin by sig the obvious, namely thet Inws, regulations end rules sre legislative ingiruments, whereas policy determinations are 208, Ag e metier of sound govermmen\, in order tp ‘bind the public, policy should torlly be efecta! ia such inrrunens. Policy decrinaions easnot override, amend orb in confit, fits laws (loclading subordinate leisiation). Otherwise the spernon between Lesilotere and Executive will diappeer. Compare Erecuive Cowl, Westar Cane Leisure » President 1f the Republic of South fica 1995 (4) SA 877 (CC) (1985 (10) BCLR. 1385) fm park (62) One thing, Yomever i ler: poling deteralnations ennot overide the lems af the provi Aet for ereasans already ive. ‘2. 22. 23, 2 Tn these circumstances the question arises whether in the absence of a statutory authorisation the Minister may intervene ex necessitate. There appears to be no snovessful post-constitutional invocation of the exercise af a power not conferred by lew but of necessity. This is no doubt becuase of the importance of the nue of Law and the doctrine of legelity, which procude the exercise of a power not confetred by law, While the Constitution itself contemplates National Treasury ond confere certain powers on it, it significantly does not gonfer any power 10 interfere in contractual velations, ‘There is, moreover, no tue factual nexessity. ‘This is because if payment (o eraployees ‘caumot be effected through Oakhay’s closed bank accounts, it can of comme be made ‘Shrough intermediaries — like an atiomeys" trust account, More importantly, however, Oakbay did not indicate whether it hus approached any of the other banks identified in the aide memoire and whether they have refused to open bank accounts for Oukbay. Accordingly the assertion (hat all aveilzble avenues have been exhansted is not bore out. In such circumstances the Minister will expose himself to ¢ suscessfil interdict ‘bya bank were be to assert a pawer hy necessity to intervene at the instance of Oskbay. Conclusion ‘For the above reasons we answer the questions for advice as follows: eensoO @ @ Banks ae mot legally obliged to provide Onkbay with reasons for closings Ockbey's accounts, It would not be pertnissible for the Minister to approach the banks to request ‘reasons for the closure of the aocomts, ani! the banks would not be abliged 10 comply with the request by the Minister — even were Qakthay to waive its right 10 canfidentiality. ‘The regulatory system does not provide a mechani¢m through which the Minister ‘may iptervene at the instance of Oakbay. ‘We shall be glad to make ourselves available to deal with any issues for further advice or clatificatian, or settle any correspondence, should this be required. We advise accordingly. 34. GAUNTLETT $C EB, PELSER Chambers Cape Town 29 May 2016G SAHARA SOLUTIONS PROVIDER Ministers Office Ministry of Finance 120 Plein Street cape Town ‘Sahara Compurers|Pty}ite 29Gaelle Avenue Corporate Park Midrand 28" June 2016 Dear Minister Pravin Gordhan, RE: REQUEST FOR MEETING TO DISCUSS CLOSURE OF SAHARA BANK ACCOUNTS ‘You may recsl that eater this year (20 Aprill Naeem Hows CEO oF akbay Investments sent a letter 10 You, upcoting you on the developments at Oakbay Investments, principally the 240 redundancies that Sahara was forced to make 2s a direct result ofthe closing of our business bank accaunts by FNB, ABSA, Standard Hank and Nedbank. Witting to you today as CEO of Sahara | can confiem that vitat banking services have still not been restored neither to us, nor for that matter other businesses across the Oakbay group, despite the \desision by our shareholders to step sway from the dey to day fnvalventent ir auc business. | wow find myself in a precarious position where } arn forced to make a number ofisportata strategie decisians concerning the future of our business - decisions which will inevitably lead £0 further redundancies. “The decisions | wil De forced to make over the coming weeks will not anty affect the tivlihoods of the remaining 103 employees 2t Sahare, bur tneir families and dependents 100. ‘would seem that the engagement from my colfesgues and me with you on PowerFM on Sunday, 26 une} has bean misconstrued in some quarters. I would like to assure you the calls related to the edtremely difficult position we find ourselves in following the banking blacklisting crisis at Cakbay. Our eustrations are fel by our employees, whe fear for their jobs. tices once senenoortre onze neue corporte Pan Sout ts Pes atn aoed Maran opaomesbore ‘uch aca Prat Bog x60 ‘allway ose ‘w85Saat 2: (27 1) Sa 1000 SAHARA COMPUTERS (PTY? LTD. fee C2 L100 eg. Mo, 1997/813860/07 Yak Mo. <70012208 wnat fossa cota Deretors Watboo | Th srwmahera citeAs an addendum to this ~following our engagement with you.on Sunday evening | have also been the recipieatafs threatening phone call agaressively warning against any furthes appeals t0 you regerding ‘the reopening of Oakbay’s bank accounts, | hope you woulld publicly condemn acts of intimidation, which eve using your name, such 3s this? \ return to the more important issue at stake - you say you are here, in your capacity as Treasury Minister, to serve the national ourpase so thet §§ millon South Africans can have decent jobs and & better economic future, | humbly plead that you find some wey to help us make a smaitstart with aut ‘own Employees, and therefore request that you meet with me, at your earliest corvenisnce, | can then brief the rest of my calleagues ard our employees on what concrete steps are being made ta secure the future of my remaining 203 employees, their families anu dependents. Yours sincerely ‘Stephen wet CEO, Sehare Head oticn sohannesbint so Guzete Ararat -corpayaue Park South (xa Preeria ain Roe grand, Somaru “Sounalnes Prime Bag 80 alte House 1685, Seth ees sek: (2719) 542 1000, {AMARA COMPUTERS (YY) LTC. Fou (27 Tg HO, Req. Nau: WATOISSHRIOT HK Mo. OTE “ema: tfessahare.ca.z3 Dieecrars G Naidoo | ETak rosa 0. »eure: MMANCE, [REPUBLIC OF SOUTH AFRICA Privalg Bag X16, Protein, 001, Wor 477 12229 8919, Fax 477 12309 3862 "PO Gon 28, Cape Town 800, Te #77 21464 B100, Fax: +2 21 a6 7884 Sar Nuarrery Michel Director Dear Mr Michell REPORTS BY REGISTERED BANKS REGARDING ACCOUNTS OF OAKGAY GROUP 1. You wit be aware from continued media statements by the CEO of Oakbay Investments and ds "partiols companies” (as the CED has tetmed them) regarding approaches to me relating to the closure of eccounta in the Oaktay group of companies. 2. My Understanding ts thatthe enifties in the Cakbay group comprise the following: 8} Mining interests in Oakbay Resources end Energy.Shive Uranium Tegete d Edge Exploration, Exploration and Resources, JIC Mining Services and Black 5) Media interests in TNA Media (Ply) Lid, New Ape and ANN 7; ¢} Other intéresis in VR Laser Services, lstandsite investments 180, Confident Concepte and Jet Airways. anticompetitive and poiticaly-motivated campaign designed to marginalies but businesses" {see the further felter of 8 Apri 2016, which | also atlac), closed ‘Dakbay entiies. bueiness accounts of 4 Oakbay contends that the sefetionahips with the Oakbay group ns sudo and JSE sponcer consequences fof it and its employees {asserted In siren tetera oe cuntiering 4 500 and 7 500) of the aloains of wccourts re serious, toifowing the decisions of KPMG and Sasfin, oa. ts lee: He | | i } \ i {10. we Clearly the alfegations made are inherently adverse to good market conduct Practices and the integrity of our banking (and with it, financial) syetern. Afthe same time it would be my concem that no loss of jos be caused in the South Afvican economy by any ifegula‘ilies such as those suggested by Oakbay. Thave pointed out to Caekbay that on the independent tegal advice | had taken, there are legel impediments to any registered bank discussing client-related matiors with soe, and furthermore that | cannot act in any way that undermines the regulatory authorities, | have however pointed out that Cakbay has legal remedies, including approaching a court (J attach in that regerd my letter of 24 May 2016, with its attached information document.) | nave repeatedly encouraged Cakbey to exercise recourse to a court to establish the legal propositions and factual stlegations for ‘which contends. Cakbay however, following what it terms ‘detailed discussions with several legal Advisors’, expresses "the strong view that given the contractual rights the banks have, any legal approach may indeed be silfsborn”. Oakbay also records that it has een icld by “the key regulators euch as the Banking Ombud and the National Consumer Council that our meiter falls outside their jurisdiction. It certainly is our view that this fliss in the face of the Banking Cade of Good Practice, yet, as case law ‘suggest, will fail in @ court of law. Given this position, as well as the decisions of he responsible regulators, we eeern to have no option open to us other than our appeal to you for assistance.” (Oakbay letter of 24 May 2016, attached) Oskbay asserts In the seme latter thal ‘no hank has given us any indication of any wrongdoing on our side” This latter statement is to be viewed in conjuncion with an interview of Oakbay’s CEO by Carte Blanche (screened on 19 June 2018), in which Mr Howa stated that one of the banks closing Oakbay’s accounts gave the following as a reason: “Without waiving our rights not to furnish reasons for our decision without inviting any debate about the correctness of aur decisions, ? point cut that the few, inclusive of South Africa's Companies Act, Regulation 43 {sic}, Prevention of Organised Crime Act, Prevention and Combating of Corrupt Activites Act and fthel UK's Bribery Act prevent us from having dealings with any person or entity whofmi) a ressonably dligant (and vigilant) person would suspect that such deetings could directly oF indirectly make us a party to or accessory to contraventions of that law. ._ We have (conducted) enhanced due diligence of Oakbay enitties and as required by the FIGA end have conciudad thet contirwing with any bank-customer relationship with them would increase our risk of exposure fo contravention of the mentioned faw 10-¢n unacceptable favel” Oakbay has persisted in its series of approsches directed fo me. As appsers from the above, acting on legal advice, It declines to seek any declaratory ruling from @ court to support either its legal contentions suggesting a duty on the part of the Minister of Finance to intervene with the banks of its factual contentions that the tanks’ conduct has an imegular and indeed improper basis. This stance has however been accompanied by ¢ series of radio interviews and media statements by spokespersons for Oakbay In which it continues to assert that “the response from the institutions fis} intransigent” (es Mr Howa put It in his latter to me of 17 April 2046), ‘and to aseert that the closure of socouts toak place on art irregular basis, Lis my concem that the continued éllegations of inegularily by the banks concemed, in ciroumstances in vhich Oakbay itself refuses to obtain an appropriate declaratory42. 13, 14, 15. 16. order from the cours, is harmful to the reputation af South A‘tica's financial system within the globel financial system. As you are sware, domestic banks are not only regulated domestically, but also by overseas regulators, in terme of demanding intemational slandards tke Basel ll and Financial Action Task Force recommendations on ntoney-laundering and financing terrorism. Cabinel has also noted that itis in the national interest to ensure that the domestic financial sector is regulated according to intemational standards in order te promote economic growth and reduce tisk ta the fiscus. ‘Cabinet, since the 2008 global financial crisis, took numerous decisions to improve market conduct practices by financial institutions. This is to ensure that customers of financial institutions are treated fairly. fn the circumstances, | would be glad to be advised whether or not the registered banks have indeed reported to the Financial Inteligence Centre CFIC") 98 Indicated by the above public staternent by Mr Howa, or whether no suich reports have been made. In the circumstances, 1 am conside/ing the merits of oblaining definitive court ruling on whether: {@) the Minister of Finance (or Govemor of the SARB. or Registrar of Banks) has the power in law to Intervene with the banks concsmed regarding thelr ciosure of the Oakbay accounts held with them; and (b} @ basis exists in fact for the contention that the relevant banks terminated the accounts in question for a reason untelatad to thelr statutory duties not to have dealings with any entity i @ reasonably diligent and vigilant person would suspect that such dealings could direcity or indirectly make that bank a party or accessory ‘tp contraventions of the relevent lewe (dented sbove), As noted above, it is apparent from Oakbay's own pubile statement to Carte Blanche ‘on 19 June 2018 that at least one of its aretwhile banks has glven as the hasis for the closing of accounts that bank's statutory duty to report under Financial Inteligence Centre Act 38 of 2001 (FICA"}. in view of the above, | request you, pursuant to your powers aforementioned, read with section 29(4)(a} and (c) of the FICA, io intorm me at your very eatiest convenience (fat all possible by 4 August 2016). (a) Whether FIC has indeed received from the aforementioned banks reports in terms of the FICA relating to any entiles in the Oakbey Group, as listed above (ar otherwise); {b) over what pariocis); (c) in respect of which entities; and (d) inwhat recpective amounts relating to each such entity, It is not for my purposes necessery, at this stage, to request further details regarding the nature of each transaction reported, or the parties thereto, but you may hold a different view.17 | copy this letter fo the Govemor, given the Reserve Bank's own interest ir issues of inamciet stability 10 which I have referred, and to the Regisirar of Banks, given his ‘own institutional interest (in terms of sections 4 and 7 of the Banks Act) inthe matters raised. 18, Your urgent response would be greatly appreciated. Youre sincerely Show PRAVIN J GORDHAN, MP MINISTER OF FINANCE Date: 2% ~ 07 ~Zoi¢ Mr Kyanyago Govemor: South Afican Reserve Bank Mr K Naidoo Registrar of Banks: South Afican Reserve BankMINISTER: FRANCE REPUBLIC OF SOUTH AFRICA, Private Bag X4°5, Proc, OOM, Yk +27 12 3280644, Fax +27 12329 2262 BO Bos 20, Cape Town, A000, Ya +27 21 464 6700, Fax: #27 21481 2034 ‘Mr Kuben Naidoo Repisttar of Banks ‘South African Reserve Bank PO Box 427 PRETORIA 0001 Dear Mr Naidoo: REPORTS BY REGISTERED BANKS REGARDING ACCOUNTS OF OAKBAY GROUP You will be aware from continued media statements by the CEO of Dakbey Investments and its "porticilo companies" (as the CEO has termed them) regarding epproaches to me relating ta the closure of accounts in the Oekbay proup of companies. My understanding is that the antitles in the Cekbay group comprise the folowing: @} Mining intetests in Cakbey Resources and Energy,Shiva Unanium,Tegeta Exploration end Regourcsa, JIG Mining Services end Black Edge Exploration; 1b} Media interests in TNA Media (Pty) Ltd , New Age and ANN 7; 6) Ober interests in VR Laser Services, Islandsite Investments 180, Confident Concepts and Jet Airways, Jn these approaches (culminating in & letter of 28 June 2016 following a similer leer on 24 May 2096, both of which } attach) Dakbay has asserted thst Absa, FNB, Nedbank, Sasfin and Standard Bank, without justification, and as “the result of an Snti-compettive and polticaly-motivated campaign designed to marginelise our businesses” (one the further letter of 8 April 2076, which | also affach), closed business accounts of Oskbay entities, Oakbay contends that the consequences for it and its employees (asserted in different letters a5 nuntbering 4 500 and 7 590) of the closure of sccounts are ‘serious, following the decisions of KPMG and Sesfin, too, to terminate their relationships with the Oakbay qeoup ae suditors and JSE sponsor respectively, ‘Clearly the ahegetions made are inherently adverse to good market conduct practices and the Integrity of our banking (and with f, financial) system, Al the same. time it would be my Concem that 10 loss of jobs be caused In the South African ‘economy by any irregularities such as those suggested by Oskbay. have pointed out to Oakbay that on the independent legal advice | had taken, there ave legal impediments to any repistered bank discussing clent-related matters with10, 1". me, end furthermore thet | cannot ct in any way thet undermines the regulatory authorities, 1 have however pointed out that Cakbay has legal remedies, including approaching @ courl. (J attach in that regard my lefter of 24 May 2018, with its attached information decument.} (have cepeatadly encouraged Oakbay fo exercise recourse to @ coutl fo establish the legal propositions and factual allegations for which it contends. Oakbay however, following what il terms “detailed discussions with several legal savisors’, expresses “the strong view thet given the contractual rights the hanks ‘have, any legal approach may indeed be slll-bon’. Oakbay also records that it has teen told by “the key regulators such as the Banking Ombud and the National Consuiner Council that our matter falls outside their jurisdiction. It certainly i$ our view that this flies in the fece of the Banking Code of Good Practice, yet, 85 case law suggest, wil fail in 2 court of law. Given this position, as well as the decisions of the responsible regulators, we Seam to have no option open to us other than our appeal 10 you for assistance.” (Dakbay letter of 24 May 2016, attached} ‘Gukbay asserts in the same letter that ‘no bank has given us eny indication of any wrongdoing an our side” ‘This latter statement is to be viewed in conjunction with an interview of Gakbay’s CEO by Carte Blanche (screened on 19 June 2016), in which Mr Howa stated that ‘one of the barks closing Oakbay's accounts gave the following as a reason. “Without waiving our rights not 10 furnish reasons for our decision without inviting eny debate boul the correciness of our decisions, ! point out that the lav, Inclusive of South Africa’s Companies Act, Regulation 43 {sic}. Prevention of Organised Crime ‘Act, Prevention and Combeting of Corrupt Activities Act and Ithe} UK's Bribery Act preven! us from having dealings with any person or entity whofm) @ reasonably iigent (and vigilant) person would suspect thet such dealings could ditectly or indirectly make us a party fo oF accessory to contraventions of that law. .. We have (conducted) enhanced due diligence of Oskbay entities and as required by the PICA and have concluded that continuing with any bank-custorer relationship with them would increase our risk of exposure 10 contravention of the: mentioned ew to en unacceptable level” ‘Cakbey has persisted in te series of approaches directed to me, As appesrs from the above, acting cn legal advice, it declines to seek eny dectaratory ruling from a court to support either its legal contentions suggesting 8 duty on the part of the Minister of Finance to intervene with the banks or its factual contentions that the banks’ conduct has an ireguiar end indeed improper basis. This stance has however been accompanied by 2 series of radio interwaws and media statements by ‘spokespersons for Oakbay in which it continues to assert that “the response from the institutions fis] intransigent” (as Mr Howa put it in his letter to me of 17 April 2076), and to assert that the closure of accounts took place on an Itragular basis, {tis my concer that the continued aegations cf irequiatity by the banks concamed, in crcumstances in which Oakbay itself refuses to obtain an appropriate deciaralory ‘order from the courts, fe harmful fa the reputation of South Affica’s financial system vwilhin the global financial system. As you are aware, domestic banks are not only regulated domestically, bul also by overseas regulators, in terms of damanding international standards like Basel it! and Finantial Action Task Force recommendations on money-laundering and financing terrorism. Cabinet hes also noted that itis in ihe nations! interest to ensure that the domestic financial sealor is regulated according fo intemational stendards in order to promote economic growth ‘arid reduce risk to the fiscus.12, 13, ce 18. 1. Cabinat, since the 2008 global financial crisis, took numerous decisions to Improve market conduct practices by finanolal institutions, This is to ensure that custemers of financial institutions are treated fairly at all times. In the circumstances, ' am considering the merits of obtaining a definitive court ruling on the whether: (2) the Minister of Finance (er Governor of the SARE, ot Registrar of Banks) has the power in law to frtervene with the banks concemed regarding thelr closure of the Oakbay accounts held with them; and {b} a basis exists in fact for the contention that the relevant banks terminated the ‘accounts in question for 2 reason unrelated to thelr statutory dules nat to have dealings with any entity if reasonably diligent end vigilant gérson would suspect that stich dealings could directly or Indirectly make that bank @ party or accessory ‘0 contraventions of the relevent lows (identified above), As noted above, it is apparent from Oakbay’s awn pubite statement to Cane Blancho ‘on 19 June 2016 that at laast one of its erstwhile banks has given as the basts for the closing of accounts that bank's statutory duty to report under Financial intelligence Cera Act $8 of 2001 (*FICA") In View of the above, | request you to inform me at your earliest convenience, #1 all possible by the 04” August 2016 of the following: (a) whether your office has Indeed recelved fram the aforementioned banks reports: tn terms of the applicable banking legislation relating fo any entities in the Oskbay Group, 38 listed above {or otherwise); (b) over what period(s): (©) in respect of which entities; and (@) in what respective emounts relating to each such entity. It is not for my purposes necessary at this stage, fo request further details regarding the nature of each transaotion repérted, or the parties thereto, but you may hold a siftesent view. Your urgent response would be greatly appreciated. ‘Yours sincerely ane PRAVIN J GORDHAN, MP MINISTER OF FINANCE Date: 2 ~ 27-206 co, Mr L Kganyago Governor, South African Reserve Bank Mr-M Michet! Director: Financial intelligence Centreoi dL South Arican fessorve Bak ‘Offs of the Governor ‘Honourable Mir Pravie J Gardhan, MP Minister of Finance, 4 Church Square Pretoria 0002 Der Wlin Gorden Cabinet's decision on enguging banks on the closure of individusl bank accounts: The recent Cabinet decision i appoki aeubcorrenites of ree Ministre engage banks on the closure of an individual entity bank account refers, As you know, the South African Reserve Bank (the Bank) ie responsible for the prudential suparvasie of aornmetetl banka and the promition of franca sabiRy: -Supervisian which ls forward looking, ‘of tha euccess of any modern econumy, Given tts ngotaoe, ean services 1@ reaponslbilty of supporting and ticlitating wade, Infrastru i. capital raising activities of both tha priate and ipl: lely réguiated financial services Sema eee bedrock rican trade and infrastructure development, 4 key component of the growth arid development of fe sub-Saharan ‘economies especially. Iti in this context thel we weuld like fo raise whh you Our concerns tegarding Cabinet's proposed sppraach and decision on the matter pertalning to the relationship betwaen banks and thelr incividuel customers. ‘n fern othe ania iledsano Carga Ack 2607 (Act 98 of 2001) in overeat, and related reguiptions thereto, banks are fequired amjorige! others to. athers to ' Aapeet side of conta ts lane Bice oe an alerts yh raystornne. Ac cach, nel colt lo eraure thal achive fo to these as hoe seer noun Sesata faa Vide een Ht ‘thelr customers, As part of these assesemcinis, and within the narmal operations of banks, they may have io close or iter condligns qn customer accounts tr any given part, 8 subatati! mute Of bank accounts aye Olosad or have thelr co on Ghee gu ewig rin foal (7 Fok OR» TRV sag Sel Pins O22 + non + TET TAY AHES & FHT TESHEAEcontracts which govern these arrangements. This isnot nly clea for mantlning the Integy ofthe Rania sytom, but kl loo for promoting end ensuring the on-going financial soundness Of banks e¢ pnidential institutions, In acoordence ib tbe provisions of the Banks Act (Act 4 of 1960} a8 amended, and In the public rast, Moreover, we note that Cabinet's rasolufon for certain Ministora to engage with banks wes ifomed by conerns tht he soloos tase by fe banka may ek pled foreign investment. We caution agelnet the unintended We at al oes an pwede sy 2f bamks to make independent operatimnel decisions within the parameters af the ting seg! rd regulary fremeworks. This could introduce helghlened levels of ‘and pose 3 risk to South Africa's financial stably, {tts the Bunks view that euffictent remedies and escourse for bank customers exist in the current | gmat your eispona! ta dleoums this matter furhar F recuired, a your eared oom ‘Youre sincarely Lenetja Kgtinyago Governor Dats: 16 APR ACEK 1 August 2016 Office of the Director Private Bag X17 Tebogo Srakwane Centurion 1046, Ret Tait -Minlsey “ee orva7 12641 e000 Fax-27 12.681 6407 teboge shokwa za Mr P J Gordhan, MP Minister of Finance Private Bag X115 Pretoria 0001 Deer Honourable Minister REPORTS BY REGISTERED BANKS REGARDING AGCOUNTS OF OAKBAY GROUP { acknowledge receipt of your letter dated 28 July 2016. J havo carefully studied the matters raised in the letter and the request for information concerning possible reports made under section 29 of the Financial Intelligence Centre Act, 2001 (the FIC Act). The disclosure of information concerning reports under the FIC Act is strictly govamed by, among others, section 40 of the Act. By virtue of these provisions the Centre is allowad ta disclose such information only in limited ciroumstai and only to @ limited group of potential recipients. The FIC Act, 29(4X(c), provides for an exception to these controls where such Information Is io be used for the purpose of legal proceedings. The mechanism provided for in the FIC Act where such information is to be tendered In evidence in legal proceedings is by means of a certificate issued under section 39 of the Act. Given that your letter indicates your intention fo approach a court for a definitive ruling on certain questions of law, and by virtue of my powers under the FIC Act, Ihave decided to issue @ certificate under section 39 of the Act, relating to possible reporis that may have been made in relation to the entities mentioned in your letfer. ! must emphasise that such a certificate is only to be Used for the Purpose of introducing evidence in lege! proceedings and will only confirm or ‘efute the receipt of reports pursuant to the FIC Act. Such a certificate will not financial Intoliganed : RapUBLG OF SouTH Sesteat =disclose any information concerning the content of any particular report which the Centre has received. The certificate will be issued on or before 4 August 2016. Kind regards MURRAY MICHELL DIRECTORdb South Atrican Reserve Bank ‘Office of ie Geputy Gavemoe ‘Kuben Naidoo STRICTLY CONFIDENTIAL, 2016-08-12 Honourable Mr Pravin J Gordhan, MP. The Minister of Finance 0 Church Square Pretoria 0001 Dear Minister Gordhan REPORTS BY REGISTERED BANKS REGARDING ACCOUNTS OF OAKBAY GROUP ‘Your latter dated 28 July 2016, regarding the accounts of the Oakbay Group, refers. ‘The contents of the letter have been noted as wall as your intention of approaching the ‘Court for @ definitive ruling on the issue. With regart to these issues, the South African Reserve Bank (“SARB’ or “Bank") has acquired the services of senior lagal counsel to provide the Bank with legal advice and guidance in the matter. In the interim however, you have requested me to address you with regard to any reports received by the Office of the Registrar of Banks "...in terms of the applicable banking \epistation ralating to sny entities in the Oakbay Group ...", It is hereby confirmed that to the best of my knowledge, acting on available information, this Office has not recelved any Such reports from the banks regarding the issues you raise in your fetter. The information that banks provide to the Financial Intelligence Centre regarding specific transactions are, in general, not forwarded to the Office of the Registrar of Banks. | have however been informed by the Financial Surveittarice’ Department of the Bank (‘FSD’) that Standard Bank has informed FSD about a transaction invélving VR Laser Asia, an associated company ¢ the basis of an exchange control related investigation by that debariment. ‘Yours sincerely Ruben Naidoo Registrar of Banks Dato: 12 JO9/ 2m POBox a7 Prelora O00 + 37CHilenJosach So Pte OCD = Gouna + Tel 427 Y2GUO7TR + Fe o2? 1297-2008 © warrenLW CAKBAY INVESTMENTS (PTY 25 July 2016 Minister Pravin Gordhan ‘Minister of Finance Republic of South Aftica Dear Minister of O: jank Accounts ‘Thank you for your letter dated July 14 which J received on July 18. ‘My apologies for not sending you the bank letters, Unfortunately, I did not have the request in the notes I jotted down at our last meeting. J have, however, ettached the notice letters from al four banks today, Hopefully, we can jointly find a way to understand the real reasons for the banks decision to unifaterally close our accounts, ‘With regards to your question about the letter in the publi¢ domain, it is critical thot ‘you see the correspondence within the context of the letters that followed (attached for ‘your case of reference) in which we asked the writer to clarify his reference to the many pieces of legislation and whether Standard Bank had found any evidence of us traosgressing any piece of legislation. For the record, we have made the same request to each of the banks and to date we have not been provided with # single example of where we have transgressed any of the legislation mentioned in their leters. Further, we have not once had a query from any of the benks on any of our transactions, In detailing the contents of the Standard Bank letter in my TV interview with Carte Blanche, I was mercly trying to illustrate that these were the allegations that were being made, but without being provided with, a shied of evidence. We have not decided against approeching the courts. Our fitst priority has been to move decisively to stzbilize the business, ensure some level of sustainability which would safeguard the 7500 jobs across our business. Once we have achieved a moderate level of stability and sustainability and when we deem our current initiatives to reverse the current position are exhausted, we will ceftainly consider the legal ‘option which we understand to be a lengthy and arduous process. As you would understand, without banking facilities we won't have a business to operate well before the conclusion legal proceedings, Let me also clearly state our support for any end all legislation which advances the clampdown on corruption and money-laundering. As such, please be assured that despite the many unproven media articles, as a company we will not be party in any ‘way to any steps to undermine the financial stability vf ous country. 89 Gazelle Avenue, Corporate Park South, Old Pretoria Main Road, Midrand Johannesburg, South Affiga Postal Address - Private Bag X 180, Halfway House, 1685, Johannesburg, South Africa Tel; +2711 5421000 Fax: 427 11 542 1100 www.oakbay.co.za yiFinally, let me assure you of our support for all initiatives to create and sustain jobs within our economy. With refevence to your comments about the recent disciplinary action against staffers at ANN, let me assure you thet they are duc to transgressions of our disciplinary code and that our processes are fully compliant with the existing legislation. Uf you so wish, I can provide you with greater detail on this matter when we next meet. Let me also assure you that no matter the outcome of the hearing, the number of jobs that exist at ANN7 will continue to increase as we offer young South Africans an ‘opportunity that has remained closed for so many years. As an exceviive team charged with leading the business, we will continue fo build our business on sound and good governance, always using our constitution as a guiding principle. J would also fike 10 give you an update on the ripple-effect the banks' aetions have had ‘on Oakbay and is operations when we sect hopefilly in the not too distant future. [ will also bring elong my full file of all the correspondence with the bariks so that you can undesstand our frustration at not getting a proper explanation for their unprecedented action, ‘Yours sincerely Nazeem Howa Han ‘Chief Exceutive Onkbay InvestmentsMINISTER: FINANCE, REPUBLIE.OF SDUTHAFPRICA, Pevmie Sag 118, Pri, O001, Tot +27 12 223 ant, Fax: 427 12323 3262 POBox 28, Cojo Town, R000 Tet +27 21 Abs 6100, Foxe 427 21 40% 2034 Mr Nazeom Howa Chief Executive Officer Oaktay Investments 144 Katherine Street ‘SANDTON 2031 Dear Mr Howa CLOSING OF OAKBAY BANK ACCOUNTS Your letter of 25 July 2016 refers. The letter does not indicate why “the full file of all the correspondence with banks" (as you term it) has not been provided. Every opportunity has heen proviced tor Oskbay 10 de 80. since your first approach to me in April. My letter dated 24 May 2016 recorded that you had undertaken to provide “all relevant information’, based on my request at the meeting for all relevant correspondence from banks. | requested again this information in my letter of 14 July 2046 when | also pointed out that to date 1 had not received any copies of these letters from banks related fo the closure of your accounts, it Is concerning that Oakbay still does not accept that the Minister of Finance, in law, is unable to interfere with the relations between registered banks and their clients. This assertion by Oakbay also remains imconsistent with the legal advice that Oakbay has received from several of its awn legal advisers. This (as explicitly recorded by you in your Previous correspondence) is that it has no case against the banks arising from the closing of the accounts. In regard with the contention in the third paragraph of your letter that "the real reasons” for the banks’ closing of accounts have not been disclosed, Cakbay's suggestion that the closure of its accounts was irregular (this in conflict with both the legal advice 1 have received and that which you have recorded you have received) continues to be a serious ‘concern in terms of the functioning end reputation of the South African financial sector and, in particular, banking. Banks in South Africa are highly regulated, not only by South African ‘aws, but in all countries where they may operate, in order to facile trade and transactions for South African companies and residents. 41am also concemed f Cakbay continues, as first stated in correspondence four months ago, with the possible contemplation of implementing job losses among its employees (and to ‘subject certain of its journalist-employees to disciplinary proceedings).Under these circumstances, further delay is Gleatly wadesirable in my cansideration of the matter, Should you wish to honour the undertaking made ard recorded on 24 May and again on 14 July, or would fixe to make any further representations to me, { request that you Convey thuse electronically to me by 2h00 on Friday, 12 August 2016. On receipt of the ‘above documents, | shail then schedule a meeting with you as requested in your letter and in your earlier etter dated 18 July 2016, Yours sincerely ed od PRAVIN J GORDHAN, MP MINISTER OF FINANCE Date: 9 08 - 2GRebecca Tee From: Ministry Registry Sent 17 August 2026 06:22 AM To: Ismail Momoniat; Rebecca Tee Subject: FW: Closing of Oekbay Bank Accounts For your information. From: Nazeem Howa Sent: 17 August 2016 06:06 AM Tot Ministy Registry ‘Subject: Re: Closing of Oakbay Bank Accounts Dear Ms Scott Jam currently out of the country. ! will respond formally upon my return to South Africa, Nazeem From: Ministry Registry Date: Wednesday, 10 August 2016 at 3:57 PM ‘To: Nazeem Howa Subject: Closing of Qakbay Bank Accounts Dear Mr Howa Please find attached correspondence for your attention from Minister of Finance. Please could ! humbiy request that you confirm receipt. Kind regards Joanne Scott Ministry of France ‘40 Cu Square Old Reserve Bulking, PRETORTA rate Bog X115, PRETORIA, 2001 “Tol 427 12 ats 6150 ‘au 427 12 223 8D Hobie: +27 72.287 7361 ‘Ember eis eevespendence: uincenereasurLontaa DISCLAIMER: This email and its contents are subject to our email legal notice which can be viewed at“= OAKBAY INVEST MERTS (PTY) 1LTD. 09 September 2016 ‘The Hon Pravin Gordban Minister of Finance Pretoria ‘Dear Hon Minister ‘Thank you for your letter of August 10, and my apologies for not responding earlier. Tam very happy to share with you my full file of correspondence with the banks as suggested in my last letter to you. It makes for interesting reading. would prefer if possible that we meet to discuss the processes we have engaged in as they have been supplemented by several meetings and istephone calls which will add considerable flavour to the correspondence and provide you with » much fuller picture. Tam happy to meet at your convenience to show you my file and inform you of my various meetings and telephone calls. 1 am happy t0 further engage constructively with the other points you make in your letter which I believe can best be dealt with through a meeting, tather than letters. ‘Yours sincerely het Chief Executive DIRECTORS : N HOWA | A CHAWLA I R RAGAVAN, 144 Katherine Street, Grayston Ridge Office Park Block A Lower Ground Floer, Johannesburg, South Africa Fel 427 11 262 3870 ww.oakbay.co.zaPt 4 August 2016 Office ofthe Director Private Bea X17 a ‘Teboyo Shakwane Centurion 0048 Ree Nin ‘Tetezr 124% somo Fax #27 12.861 6407 tebogo,shakwane gic gov MP J Gordhan, MP Minister of Finance Private Bag X115 Pretoria 0001 ‘Dear Honourable Minister REPORTS BY REGISTERED BANKS REGARDING ACCOUNTS OF OAKBAY GROUP refer to your letter of request dated 28 July 2076 and my subsequent reply dated 1 August 2016. ‘have carefully studied the matters raised in your letter and am saliefied there is legal mertt and relevance in the request as if relates to the mandate, powers and functions of the Finanoial Intelligence Centre (‘the Centre”), Herewith please find altached a Certificate, issued under my hand in terms of section 39 of the Financial Intelligence Centre act (the Act?) in which certain information as reported to the Centre in terms of section 20 of the Act (subject to section 38(3) of the Act in respeot of protecting epartere’ identifes) is sel out, In addition, please note that in terme of section 39 of the Act, a centficate issued by ant afficial of the Centre that information specified in the certificate was reported or sent to ‘the Centre in terms of Section 28, 29 or 30(2) or 31 is on its mere production in a matior before court admissible a6 evidence of any fact contained in it of which direct oral evidence would be admissible, Kind regards [i> . MURRAY MICHELL DIRECTOR te finenctal inteill igence catPL CERTIFICATE IN TERMS OF SECTION 39 OF FINANCIAL INTELLIGENCE CENTRE ACT, 2001 (ACT NO 38 OF 2001) I the undersigned, MURRAY STEWART RODON MICHELL An official of the Financial Intelligence Centre ("FIC*), hereby states that: 4. The Financial intelligence Centre (Centre), was established in tenns of section 2 of the Financial intelligence Centre Act 38 of 2001 (‘the Act’) 2. Section 3 of the Act states that the principal objective of the Centre is, to assist in the identification of the proceeds of unlawful activities, the ‘combating of money laundering activities and the financing of terrorist and related activities. 3. (am appointed under section 6 of the Act as the Director of the Centre. 4. My responsibilities as the Director are defined in section 10 of the Act and includes: 4.1 the performance by the Ceritre af its functions and 42 taking all decision of the Centre in exercise of its powers in performance of its functions, except thase decisions taken in consequence of a delegation or instruction in terms of Section 16 of the Act.5. A function of the Centre is to receive suspicious transaction reports, reported / sent to the Centre as contemplated in Section 29 of the Act. 6. On 28 July 2016 | received @ request for information from the Minister of Finance; the request is attached as Annexure A. 7. | studied the request and: 7.1 was satisfied that there was legal merit and relevance in the request as it relates to the Centre's mandate, powers and functions and 7.2 noted that the request did not contain data discriminators in relation to the persons or entities mentioned in the request. 8. The Centre used the following data discriminators to icentify the information specified in this certificate relating to persons of entities associated with the persons of entities mentioned in the request: 6602056061184 _| GUPTA AK AJAY KUMAR, 6806145105080 | GUPTA AK ‘ATUL KUMAR. 7004042051081 | GUPTA c CHETAL 7005101418186 | GUPTA. is. ‘SHIVANI 7208056345087 __| GUPTA RIC RAJESH KUMAR 7710240935087 _| GUPTA A ART! 4 =| 9907146112184 | GUPTA v VARUN, 9498046139081 | SINGHALA |S. ‘SRIKANT (Minor) —_| 9511156045087 | SINGHALA_[S. SASHANK Linon |eu ‘Aeon Diamonds AL SOMES 2003/017670107 Airipalm Managed Services ~ | BOCTIOBSTEDT ‘Afripalm Resources ‘2008/04 1933/07 | Comair 1967/006783/06 [Confident Concept ~~ 20067023982/07 | Gyret Technologies | 2006/0%4823/07 Green Fig Trading 5 “7200870217 17707 Infinity Media Networks | BOTIDOSDSIOT Telandsite investments 254 NE bc JIE Engineering Services ZOOTOOSOOAICT 4 “SIG Mining Services Africa | 20071044 186/07 JIC Wining Services Asia ~Tpoorioe4t407 Moetapele Projects: 2006/021771107 | [Nortiam Platine "(0777005282108 ‘Sahara Computers | 1997707559007 Sahara Media Holdings 2006/013450/07 ‘Sahara Press | 2008/070256/07 Shiva Uranium 1 1927/008085/06 Suni Equity investments [ zooaioras22i07 ‘Surya Crushers 2012103754007 Thelo Cement 2008/028825107 Thelo Investments | 2006/031859/07 Tha Media 2010/008568/07 ~~) Uni Africa Hordings 20041016237107 Vusizwe Media BODBOZISTIOT Woodlane Consortium 2OOTIOSTSELIOT 9. By virtue of the powers vested In me as the Director af the Centre under section 39 of the Act, and subject to section 38(3) in respect to protecting the identity of the reporter, | hereby confirm that theinformation set aut below was reportad or sent to the Centre in terms of Section 29 of the Act: Row | Date... | STRNumber _>- ‘Stibjects Reported Tn value 2092-12-10 | STRIODO4OZOIZI210ME | Ajay Kumar Gupia 1 o _ \ 859,933 2043-05-17 | STRIODTSS201S0517/7E | Ajay Kumar Gupta 2 i 961,932 | 2013-05-17 | STR/00167/20130817/VE | Atul Kumar Gupta 3} | 961,932 2013-05-77 | STRID0178/2071308171VE | Rajesh Kamar Gupta 4 ‘Shubhangi Gupta 34,008 | BOTS-06-20 | STRIOGG 1/20730620/0E | Atul Kumar Gupta 5 Se _ 948,150 DASA | STRINGTOTAOTSOTTE | Atul Kumar Gupta 981,082 DOV4O-06 | STRIOGEAOTAOZOEIE | Atal Kumar Gupla | 7] 38,000,000, Bata02-07 | STRIOGOAWIOTAG2O7IVE | Atul Kumar Gupta al A ¥. 38,000,000 | 2014-04-10 | STRIGCINAIANT40410UE | TEGETA RESOURCES (PTY) LTD 9 a zy _|___ 5,000,000 DREOT-24 | STRITIOUDOTT2ANE | INT CHAWLA-AIGUPTARK 40 | Rajesh Kumar Gupta 92,045 DOI4-AD-12 | STRIDDONIIOHZIGIVE | OAKBAY RESOURCES AND fh age ENERGY (PTY) LTD 2,000,000 2014-12-15 | STRIDUUZEHZOIAT2TSIVE | Atul Kumar Gupta 7; {12 1,070,749 2075-02-06 | STRIOOAAT IAD IBODUETE | SHIVA URANIUM LD 13 6,000,000 2015-03-16 | STR/O0221/20150316N/E | SAHARA COMPUTERS (PTY) CTD | Ajay Kumar Gupta 4,660,000 Atul Kumar Gupta 6 Rajesh Kumar Gupta 2016-01-26 | STRIOOTS 1720760126 | ANNEX DISTRIBUTION (PTY) LTD 6 “ 1,242,306 | 2076-02-04 | STRIOO27320 1602047 | Atal Kumar Gupta 46 17,133,000 | 2016-02-05 | STRI00573/20 1602087 _| SAHARA HOLDINGS (PTY) LTO Mutiple 7 Atul Kumar Gupta, Transactions 2016-02-05 | STRIOGSESZ01E02057VE | SAHARA HOLDINGS (PTY) LTD Multiple 18 Atul Kumar Gupta Transactions 2016-62-07 | STRIGQIOTIANTEN2O7IE | SAHARA HOLDINGS (PTY }LTD 19 |___4.250,000 &STR Wamber Subjects Reported Rand value Ne : ® os D2 | Reported [ 20160207 ‘STR/00008/20160207/VE SAHARA HOLDINGS (PTY )LTD zo; = __ 11,475,000 | 2016-02-08 | STR/00009/20160209/A7E Rajesh Kumar Gupia wy [Atul Kumar Gupte 18,146,000 2016-02-26 | STRIOCESEI201G0226/E | SAHARA COMPUTERS (PTY) LTD | ‘Wate | Rajesh Kumar Gupta Transactions Atul Kumar Gupta x Chetali Gupta 2016-02-28 | STRIN0E26/207 602291 [ANNEX DISTRIBUTION (PTY) LTD Wltiple 23 | Transactions: 2016-03-04 | STRIO0338/20160304VE {SLANDSITE (NVESTMENTS ONE | i HUNDRED AND EIGHTY (PTY}LTD. Transactions 4 | Atul Kumar Gupta 2016-03-07 | STRIOOOIS/20160307 | OAKBAY INVESTMENTS (PTY) LTD | Taaripie | ISLANDSITE INVESTMENTS ONE | Trerisactions HUNDRED AND EIGHTY (PTY) LTD | | Arti Gupta ‘Atul Kumar Gupta Ghetali Gupta | Rajesh Kumar Gupla 25 | DOIEOSAT | STRIOATAN GOST! SAHARA DISTRIBUTION (PTY ) LTD Mliple 26 | | Transections 2016-03-17 | STRI00084/20160317/E } CORRECT MARKETING CC 27) | 5,000 2016-05-18 | STRIOODISADIGOSTIENE | SAHARA HOLDINGS (PTY) LTO Wiutiale SAHARA COMPUTERS (PTY) LTD Transactions 2a | tu) Kumar Gupta | FOT6OSa7 | STROOTARAO TENSIVE | MABENGALA INVESTNENTS (PTY) Malle uD Transactions Rajesh Kumar Gupta 29 WOVGATS | STRMGERAOEOSI TE [Atul Kumar Gupta Multiple 0 {_ | Transactions | 2016-08-51 | STRIOOTSE2076033170 _ | MABENGALA INVESTMENTS (PTY) Multiple Lip Transactions 31 Rajesh Kumer Gupta BSOSSt | STROTTTAROEORWE [Atul Kumar Gupta ‘iiatipie 32, Transactions | 2016-08-24 | STRVO0187/20160331VE OAKBAY INVESTMENTS (PTY) LTD ‘Multiple Arti Gupta Transeetions Aiul Kumar Gupta Chetali Gupta Rajesh Kumar Gupta 33 mal = \ PETA | STRIOITETI0 60ST | TNA MEDIA (PTY) LTD Muliple 4. Atul Gupta Transactions[Row | Date STR Number ‘Subjects Reported [Rand Value Now| ot 4 a Oe eee S “|. Reported | 2016-08-31 | STRIDGSETIOIEOSSTIE [TNA MEDIA (PTY) LTD ‘Multipte 35 | Atul Gupta ‘Transactions \ “2016-02-31 | STRIG03AS/301603317E_ | SURYA CRUSHERS (PTY) LTD. "Multiple 36 Varun Gupta ‘Transactions DIGOSS | STROTATEND SOS | HEWSHELF 680 (PTY/LTO aliple 37 | | Transactions lr | 2016-03-31 | STRIOOTSE/2016033TVE | MABENGALA INVESTMENTS PTY | 981 LTD és, 10,000,000 ‘39 | 2016-03-37 | STRIODIE7/20 16USSUVE_| OAKBAY INVESTMENTS(PTY) CTD. 374,713,699 | 2076-04-01 STRI00336/20160401/7E | ISLAND SITE INVESTMENTS ONE "188,278,004 ) HUNDRED (PTY) LTD Arti Gupta | Atul Kumar Gupta | Chetali Gupts Rejesh Kumar Gupta 40 I y 2016-04-05 | STRIONITH201GG0SE | BLACKEDGE EXPLORATION (PTY) Multiple 4“ | LTD Transactions | [2016-04206 | STRVOGSEOZOTEOADSIE | CONFIDENT CONCEPTS (PIY}LTO | Muttigle Rajesh Kumar Gupta Transactions e | Varun Gupta | 2016-04-07 | STRI00011/20160407//& | Varun Gupta 43 202,074 2016-04-07 | STRIODIGS/ADTBOAO7IVE | SHIVA URANIUM LIMITED 125,848,620 Atul Kamar Gupta { ! Varun Gupta | 2076-04-07 | STRIOOZ7620160407/0E | INFINITY MEDIA NETWORKS (PTY) |” Lip 24,115,385 Atul Kumar Gupta 45 7 ____ [Varun Gupta | 2016-04-08 | STR/00429/20160408/VE | INFINITY MEDIA NETWORKS (PTY) | LTD 6,938,305 Atul Kumer Gupta | 46 | Varun Gupta 2016-04-11 | STR/00011/20160417//E | Atul K Gupie 47 531,570 DGOAT | STROOSODZOTWOATE | SAHARA DISTRIBUTION PTY) LID 48 ‘Atul Kumar Gupta 100,000 [12076-0417 | STRI00314/201604117/E | SAHARA COMPUTERS (PTY) LTD 49 Atul Kumar Gupta 5,018,417 | | 3016-00-47 | STRMOOSABR016071/E | SAHARA SYSTEMS (PTY) LTD | 50 Atul Kumar Gupta 2,000,000Row | Date. <-, | STR Number ; | Subjects Reported 2 y Value No. ‘ | : 3 as: = (o>. Reported 2016-04-11 | STR/0050/2016041177E | SAHARA DISTRIBUTION (PTY) LTO st Atul Kumar Gupta 4,992,556 2016-04-12 | STRIODSBIZOTEOATAME | Arti Gupia | 82 5 86,579 | 2016-04-12 | STRIOOGOO/20160412INE | Chetali Gupta js | Atul Kumar Gupta 110,766 2016-04-72 | STRIG0405/20160472I1E | SAHARA CONSUMABLES (PTY) LTD 64, | Atul Kumar Gupta [4.016.374 | 2076-04-12 | STRIODAGO/20160472N1E | ANNEX DISTRIBUTION (PTY) LTD 8B. Atul Kumar Gupta 3,657,164 2016-04-73 | STR/00034/20160413//E | SAHARA COMPUTERS (PTY) LTO Atul Kumar Gupta 41,833,304 | 56 Chetali Gupta | 2016-04-13 ] STRIOOS74/20 1604 73/7 | TWA MEDIA (PTY) LTD 87 Atul Gupta, 7,999,902 7 2016-04-19 | STRIGD432/2016047O7/E | UNI AFRIKA HOLDINGS (PTY) LTD Valine 68 Atul Gupia |. Transactions 2016-04-21 | STR/O0080/2076042777E | ISLANDSITE INVESTMENTS ONE i UNDRED (PTY) LTD 172,464,687 Arti Gupta | Atul Kumar Gupte | Cheteti Gupte Rajesh Kumar Gupta 59 ah =| | 2016-04-21 | STRIGOGO7/Z0T0042177E | CONFIDENT CONCEPTS (PTY) LTD Rajesh Kumar Gupta 78,859,600 60 | Varun Gupta 2016-04-21 | STRIOGSBEZ0 7604277 | ANNEX DISTRIBUTION (PTY) LTO | SAHARA COMPUTERS (PTY) LTD 876,001 | 61 ____| SAHARA HOLDINGS (PTY) LTD 20160421 | STRIOGASSIZOTEOAZIIE | OPTIMUM COAL MINE PTY LTD 62 1,372,756,090 ‘2076-04-87 | STRIOS1 1/20760421/i | KOORNFONTEIN MINES (PTY) 63 1,207.859,627 2016-04-22 | STR/OGSOB/2016042277 | ANNEX DISTRIBUTION (PTY) LTD \ SAHARA COMPUTERS (PTY) LTD 256,476 64 SAHARA HOLDINGS (PTY) LTD. 2075-08-06 | SAR-160506-0000128 | GAKBAY RESOURCES AND ENERGY 85 (PTY) LTD 327,424,132 2016-05-06 | SAR-160506-0000730 | SHIVA URANIUM LTD i es) {927,424 1322018-05-11 | STR-160514-0000323 OPTIMUM MINE REHABILITATION i TRUST FA t ee LL 2016-05-11 | STR-180571-0000325 OPTIMUM WLAKFONTEIN MINING 410,237 AND EXPLORATION PTY LTD 68 rc 2016-05-11 ) STR-160571-D000351 OPTIMUM OVERVAAL MINING AND 478,960 eo I EXPLORATION PTY LTD { 2076-05-17 | STR-460514-0000435. OPTIMUM COAL TERMINAL PTY 173,244,916 LTD ol i 2016-05-16 | SAR-180506-0000730 ‘SHIVA URANIUM LTO 510,064,228 nl® Z 1 2018-06-03 | STR-160603-0000380 ‘OAKBAY INVESTMENTS (PTY) LTD. 407,332,455 72 pea valae" 10. In terms of section 39 of the Act, a certificate issued by an official of the Centre that information specified in the certificate was reported or sent tg the Centre in terms of Section 28, 29 or 30(2) or 31 is (subject to Section 38(3)) on its mere production in @ matter before court admissible as evidence of any fact contained in it of which direct oral evidence would be admissible. issued under my hand at GAPE TOWN on 04 August 2016. tA 4 i ‘ MURRAY STEWART RODON MICHELL DIRECTOR: FICw WERKSMANS ATTORNENS, DELIVERED BY EMAIL Johannesburg Office ‘South African Reserve Bank ae abe BoutrAtdes Private Bag 20045 Attention: Realstrar of Banks Sandton 2166 Email: rene.vanwyk@resbank.co.ze Docex 111 Sandton Te +27 11 535 8000 Fax 427 11539 8600 vw. werksrrans.com enquiries@werksmans.comt ‘YOUR REFERENCE: ‘OUR REFERENCE: Mr E Levenstein/OPTI13268.19/#3821963v2 DIRECT PHONE: +27 11 535 8237 DIRECT FAX: 427 11 535 8737 EMAIL ADDRESS: _¢levensteiIn@werksmans.com 27 june 2016 URGENT Dear Sirs OPTIMUM COAL MINE PROPRIETARY LIMITED (IN BUSINESS RESCUE) 4 As you are aware, Optimum Coal Mine Proprietary Limited ("OCM"), the company that owns the Optimum coal mine, was placed in business rescue on 4 August 2015 and remains in business rescue. 2 We act on behalf of Piers Marsden and Peter van den Steen, the joint business rescue practitioners of OCM and on behalf of OCM. 3 OCM Is the beneficiary of the Optimum Mine Rehabilitation Trust Fund CTrust"), @ Trust established for the purpose of holding funds to secure the environmental refiabilitation obligations of OCM. 4 There is currently an amount of approximately R1.5 billion which is held in an account, In the name of the Trust, with The Standard Bank of South Africa Limited ("Standard Bank") 5 Standard Bank has advised the trustees of the Trust that It does not intend to establish business relationships with Tegeta Resources and Exploration Proprietary Limited ("Tegeta") (who nominated, and who subsequently have been appointed, the trustees of the Trust) and that it will be terminating its relationship with all companies in the Tegeta group. 6 OCMis a subsidiary of Tegete. 7 The effect of this is that Standard Bank will be closing the Trust's bank account and has requested that the Trust's funds be transferred to another banking institution, with the written approval of the Department of Mineral Resources (*DMR"). Wortamors iv Rag. No. 1990/007215/23 Roglsterad Office 159 3th Streat Sanction 2196 Sout Africa ic hater armen Monat bn tart tat fae JDBeY Af ran ua brtg 2 Guage HCD oot Fos Picasa eset voamaeat ae EEE gay tite aca Alea thea vedanta nea deena ke sa kt SPELE ps mec armen (ecient, Crna vee Chase Pier ten artes, tah at ted Behar ahs sa erate cour a Sone Wim eae Meas ata CE ‘Siwishite i vaorann O¢ Wlisns OS Wiluins Wood Sw Workman Doves ” . a JOHANNSBLIRG . CAPE TOWN « STELLENBOSCH « TYGER VALLEYormesica syeumasesee Stoszase 8 The trustees of the Trust have advised the business rescue practitioners thet they have identified the Bank of Baroda as the banking Institution to whom the Trust's funds will be transferred. At present the trustees Intend te transfer an amount of R15 billion. 9 In tight of the fact that the OM@ hes incicated that it is agreeable to the Trust's funds being ‘transferred to the Bank of Baroda, provided they are @ bank registered as such by the South African Reserved Bank ("SAPB”) and recent press reports which have indicated that SARB is investigating the Bank af Baroda, the business rescue practitioners have requested us to write to you to enquire whether SARB has any reservations or concems with the trustees transferring the Trust's funds to the Bank of Baroda, 10 We understand that the DMR has approved of the transfer of the funds, subject to the condition referred to ebove, and that the transfer of the funds is remanent. 41 Your urgent attention and response to this would he appreciated, 12 We look forward to hearing from you. Yours faithfully Werksinans attorneys ‘THIS LETTER HAS BEEH ELECTRONICALLY TRANSMITTED WITH NO SIGHATURE.