Nedbank boss says minister misled him

File: Nedbank CEO Mike Brown detailed the initial reasons for the bank's decision to close Gupta-linked bank accounts. 

File: Nedbank CEO Mike Brown detailed the initial reasons for the bank's decision to close Gupta-linked bank accounts. 

Reuters

JOHANNESBURG - The state capture inquiry heard evidence from Nedbank CEO Mike Brown on why the bank decided to stop doing business with the controversial Gupta family.

Nedbank -- like Standard Bank, Absa and FNB -- had lost its appetite for storing and moving their money.

Brown said KPMG's decision to end its relationship with the Guptas raised the alarm.

Nedbank closed five Gupta-linked accounts in early 2016.

Then, the ANC invited Brown to meet the Secretary-General and his deputy.

"I did not leave that meeting feeling that I was placed under any pressure to reopen the Gupta accounts," he testified.

"In fact, the meeting closed with me being thanked for providing information that was helpful in understanding questions that attendees get."

In May, Brown met with the inter-ministerial committee meeting.

READ: Banks claim intimidation in state capture inquiry

Mineral Resources Minister Mosebenzi Zwane agreed they would not discuss Gupta accounts but soon reneged on that promise.

"Minister Zwane referenced that Nedbank was not the main bankers to the various Gupta entities. I do not know where he got that information.

"But he then went on to suggest that, would Nedbank consider stepping in to save jobs and provide an amicable solution given that the relevant family had in the period in between when we gave notice and this meeting resigned from those companies […] our decision for closing the accounts with those account was based on the reputational and business risk associated with those accounts.

"And that reputational and business risk would not have changed or not materially have changed at all because as a consequence of the resignation of directors. The underlying companies were still in place and still operating.”

Nedbank, says Brown, ran an internal review of current and future risk before closure.

Becoming the primary banker for the Guptas would have opened them up to more risk, says Brown.

That, however, did not stop a government minister from trying.

After hearing from three of the four big banks on why Gupta bank accounts were closed, it will be the turn of Nedbank's Mike Brown to testify at the state capture inquiry on Wednesday morning.