April 15, 2016 / 2:22 PM / 2 years ago

South African banks accused of 'political stunt' in ditching Zuma friends

JOHANNESBURG (Reuters) - South Africa’s ruling ANC Women’s League and main trade union federation (Cosatu) have accused banks of pulling a “political stunt” by cutting ties with a company whose owners are under scrutiny for having undue influence with President Jacob Zuma.

Oakbay Investments, which holds the Gupta family businesses, is scrambling to restore banking relationships after all four major South African banks severed links following allegations that its owners have undue political influence with Zuma. The president and the Guptas reject the claims.

“A political stunt is being pulled by banks here,” the ruling African National Congress (ANC) Women’s League’s general secretary Meokgo Matuba said on Friday.

“We raise these pertinent issues based on our interests on the livelihood of dependents of the workers of the company.”

The ANC has not yet publicly commented on the issue, and officials at the party were not available to comment. Cosatu also said the decision to stop doing business with the Guptas would lead to job losses.

Nazeem Howa, Oakbay’s CEO, has said the firm’s 7,500 employees could lose their jobs as it will be unable to pay their salaries if he fails to restore ties with the banks.

Oakbay, which runs several businesses ranging from technology to mining and media, had been turned down for a meeting to review its ties with at least one of the banks, its chief executive told Reuters on Thursday.

Barclays Africa’s Absa, First National Bank (FNB), part of FirstRand, Standard Bank, Nedbank, investment bank Sasfin and the local unit of global auditors KPMG cut their business ties earlier this month.

The banks have declined to give reasons for their action, citing client confidentiality agreements. Standard Bank and FirstRand declined to comment on the allegations by the League and Cosatu.

Nedbank and Barclays Africa denied that their decisions to cut links with firms associated with the Gupta family were politically motivated.

Cas Coovadia, Managing Director the Banking Association of South Africa (BASA), has dismissed speculation that banks acted in concert when cutting ties with the Guptas, saying they took the decision independently and separately.

Although the Guptas’ relationship with Zuma has been a source of controversy for years, it burst into the open last month when a government minister alleged that the family had exerted undue influence, including offering cabinet positions, claims which both Zuma and the Gupta family reject.

Editing by James Macharia and Ed Osmond

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