South African government denies intervention in banks' dispute with investment company

A cabinet minister on Thursday denied allegations that the South African government is intervening in a dispute between four South African major banks and an investment company.

The government will only be interacting with the banks to find out the facts in this matter, Minister in the Presidency Jeff Radebe said at a press briefing in Cape Town.

He was responding to questions following his announcement that a team consisting of the ministers of finance, mineral resources and labour had been established to investigate why the banks decided to close the bank accounts of Oakbay Investments, the holding company for the Gupta family's businesses in South Africa.

Earlier this month, four major South African banks closed the bank accounts of Oakbay Investments following reports that the Gupta family had been exerting undue influence on President Jacob Zuma's appointment of cabinet ministers.

Radebe rejected the suggestion that what the government is doing is tantamount to bullying the banks.

He said the cabinet was concerned that this move by the banks could deter future investors who want to open South African bank accounts.

"Cabinet noted the actions by the four banks that gave notice to close the bank account of a company," he said. "Whilst cabinet appreciate the terms and conditions of the banks, the acts may deter future potential investors who may want to do business in South Africa."

Radebe said the cabinet has instructed the ministers of finance, labour and mineral resources to open a constructive engagement with the banks to find a lasting solution to this matter.

But this should not be interpreted as setting a dangerous precedent, nor is it bullying the banks by intervening in the dispute, Radebe said.