April 6, 2016 / 11:16 AM / 4 years ago

South Africa's FNB bank closes accounts of Gupta holding company

JOHANNESBURG (Reuters) - South Africa’s First National Bank (FNB) has closed the accounts of a company owned by the wealthy Gupta family, the latest example of companies cutting ties with the Guptas following allegations over their relationship with President Jacob Zuma.

Oakbay Investments, the holding company for the Gupta family’s businesses in South Africa, said in a statement on Wednesday that FNB, owned by FirstRand (FSRJ.J), South Africa’s biggest bank, had closed its accounts without giving a reason.

“We find the timing of FNB’s decision staggering given Oakbay’s accounts are in excellent financial health and we have been a loyal and profitable customer for many years,” Oakbay said.

Three other companies - KPMG [KPMG.UL], Barclays Africa BGAJ.J and Sasfin (SFNJ.J) - have already severed links with companies owned by the Guptas.

Allegations of the Guptas meddling in politics surfaced last month, when deputy finance Minister said they may have had a hand in Zuma sacking his finance minister Nhlanhla Nene.

FNB had on Friday told Oakbay it did not need its business any more, a source familiar with the matter said, a day after a top court ruled that Zuma breached the constitution for ignoring an order to repay the state a portion of $16 million spent on his private home.

Nainesh Desai, head of risk at FNB, confirmed Oakbay did not have an account with the bank but declined further comment, citing client confidentiality agreements.

Zuma has denied numerous allegations of the Guptas wielding undue influence. The Guptas have also routinely dismissed reports of their alleged influence, saying they are pawns in a political plot to get Zuma out of office.

The three Gupta brothers moved to South Africa from India at the end of apartheid in the early 1990s and went on to build a business empire that stretches from technology to the media to mining.

They have also forged a close personal relationship with Zuma, whose son, Duduzane, sits on the board of at least six Gupta-owned companies, according to company registration papers.

Zuma survived an impeachment motion by the opposition on Tuesday thanks to his African National Congress party’s majority in parliament.

Additional reporting by Zimasa Mpemnyama; Editing by Susan Fenton and David Holmes

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