Could more SA companies sever ties with the Guptas? - CNBC Africa

Could more SA companies sever ties with the Guptas?

Financial

by Aviwe Mtila 0

Corporate South Africa is cutting ties with Gupta owned businesses with the First National Bank being the latest company to do so. Flickr.

The South African, African National Congress (ANC) led government has been under a heavy spotlight lately for the alleged state-capture of the country by the infamous Gupta family, among other issues.

Corporate South Africa is cutting ties with Gupta owned businesses with the First National Bank being the latest company to do so. Other companies which have parted ways with the family include KPMG, Barclays Africa and investment bank Sasfin.

Speaking to CNBC Africa, Bernard Hotz, Director and Head of Business Crimes Practice at Werksmans, says more companies could sever ties with the Guptas. He says it’s not just about turning away business. Hotz advices companies to be critical of the type of business they’re connected to.

“We’re living in a worrying world that’s plagued with terrorism, organised crime, money laundering, and all of those wonderful things. The only way to try and combat this unlawful behaviour is for the international community to unite, formulate laws which make it difficult for people to act unlawfully and force people to comply with legislation and bring it to the attention of authorities that they’ve identified unlawful behaviour,” says Hotz.

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The infamous Gupta family is said to have close ties with President Jacob Zuma, with the president’s son, Duduzane Zuma, owning shares in Gupta businesses.

ANC members, including the Deputy Finance Minister, have spoken out alleging that they were offered government positions by the Guptas on conditions that they favour their businesses.

“Let’s look at what’s been in the news of late. You can’t ignore the fact that it’s been publicised, it’s been confirmed that a minister accompanied a family overseas in relation to negotiation of a deal. Then shortly on the heels of that, certain government ministers or deputies, coming out and saying they attended a meeting [with the Guptas], they were offered a position [in governance by the Guptas],” says Hotz.

Even though the Gupta family hasn’t been found guilty of these allegations in the court of law, Hotz says businesses have to protect themselvesfrom the damage they face with being associated with the family.

“You’ve got CEOs for instance of banks who cannot ignore that. They have to act responsibly and appropriately, and in so doing comply with the legislation. The reputational risk of not complying outweighs the risk of complying,” says Hotz.

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