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Inquiry hears of sudden ‘flurry of activity’ in dormant Gupta-linked bank account
The judicial commission inquiry into state capture on Monday heard of a sudden “flurry of activity” in a Standard Bank account held by Gupta-linked company Homix in 2014, in what ought to have raised flags with the financial institution.
This was according to evidence presented by Shiwa Mazibuko, head of the financial surveillance department at the SA Reserve Bank. The bank investigated a series of suspicious transactions involving the company.
The commission of inquiry has been investigating allegations of state capture, corruption and fraud since August 2018.
Mazibuko testified that the Homix had been largely dormant until March 28, 2014, when tens of millions of rands started flowing through it. Money was then soon transferred out of the account to companies with negligible or no online profiles.
“Up to 28 March 2014, the account was largely inactive. After that there was a flurry of activity. The account started receiving large sums of money,” said Mazibuko.
“It becomes problematic for an account that was dormant and suddenly, there were feeder accounts,” he said, adding this should have raised red flags.
Previous evidence before the inquiry revealed that Homix is a shell company nominated by Gupta business associate Salim Essa to receive facilitation fees from contracts to Transnet by various other companies, as Fin24 previously reported.
Mazibuko referred to a monitoring process used by banks called “know your customer” which tracks customer activity in a bid to detect possible cases of money laundering.
He said during April 2014, an amount of R34.5m was transferred from telecommunications company Neotel to Homix, after which the entire amount was depleted by means of electronic transfers to two companies called Ballatore Brands and Bapu Trading.
Last month, the inquiry heard that Homix earned R36m for virtually no work done in facilitating a deal between Neotel and Transnet.
Bapu Trading was later, in tranches, paid an amount totaling R327m.
Another transfer of R24m was made from Homix to Ballatore Brands and a further R50 840.00 to an unidentified entity. An amount of R179m flowed from Regiments, another Gupta-linked firm, to Homix. This transaction was followed by an amount of over R1m paid from Homix to Albatime
Judge Raymond Zondo, the chair of the commission, wanted to know why Standard Bank did not immediately pick up on the suspicious activity. He asked if this suggested that people inside that bank assisted the company.
“It is no inconceivable that they could have identified people in the bank […] and ask them to turn a blind eye. It is conceivable, but that is not to say that is what happened at Standard Bank.”
The “flurry of activity” in the Homix account continued until June 20, 2015.