BoB’s Johannesburg branch suppressed alerts of suspicious activity in the politically influential Gupta family’s complex web of bank accounts

Senior Bank of Baroda (BoB) officials suppressed numerous alerts filed by junior officials at the Johannesburg branch about transactions in accounts controlled by the Gupta brothers of the Sahara group, whose financial dealings resulted in the resignation of South African President Jacob Zuma.

These alerts or suspicious activity reports (SARs) were voided by BoB managers and thereby never reached the South African Financial Intelligence Centre, an investigation by The Hindu and the Organized Crime and Corruption Reporting Project (OCCRP) has found.

Corporate maze

Over 17,000 transactions of the BoB’s South African operations since January 2012, as well as internal communications, show that the bank continued to allow the Gupta brothers to operate a web of accounts to create a complex corporate maze even as the political scandal about their influence on Mr. Zuma was playing out.

This continued even after other banks terminated their dealings with the brothers in 2016. Their accounts received payments from state-run enterprises against bills that are under scrutiny, moved large sums of money abroad and shifted equally large sums between accounts of a clutch of shell companies.

President Zuma’s fourth wife Bongi Ngema Zuma, who was gifted a house by the Guptas, was on the payrolls of a Gupta firm for a staggering $12,300 monthly salary, making her one of the higher paid private sector executives in the country.

The South African government’s Asset Forfeiture Unit (AFU) told a local court on February 23 that much of the money that the Guptas received in the BoB accounts was illegal.

Senior government officials have confirmed to The Hindu that the BoB has sought the Central Vigilance Commission’s nod for initiating “major penalty” proceedings against two of its officials, including the former CEO of South African operations. However, no criminal investigation is under way yet, they say. BoB has decided to shut down its South African operations in the wake of the scandal.

In response to queries from The Hindu-OCCRP, the BoB said: “The South African operations of the Bank have always been, and continue to be conducted in accordance with the laws and regulations of the home and host country regulators.”