The Competition Commission has unconditionally approved a merger between two companies, a move likely to pave the way for a Gupta-linked bid to buy a bank.
The Mail & Guardian first revealed details of Gupta associate Salim Essa and little-known businessperson Hamza Farooqui’s plan to buy Habib Overseas Bank in November last year.
- READ MORE: Last-gasp bid to buy bank by Gupta allies
The Competition Commission on Sunday released a statement saying a merger between an entity called Vardospan and Habib Overseas Bank has been approved. Vardospan is jointly controlled by Essa’s Cinq Holdings (Cinq Holdings) and Pearl Capital Group Holdings Limited (Pearl Capital) of which Farooqui is a director.
Essa and the Gupta family share interests in a number of companies. He also holds a stake in the Gupta-linked VR Laser Services as well as in Tegeta Exploration and Resources, which controversially bought Optimum Coal.
The Gupta family’s lawyer, Gert van der Merwe, at the time said he had no knowledge of a plan by the family to buy a bank.
The M&G revealed details of the estimated R450-million plan to purchase Habib Overseas Bank after the country’s major banks severed ties with the Guptas.
Legal action is pending after Finance Minister Pravin Gordhan brought a high court application for a declaratory order that he may not intervene in the decision of the banks to close their accounts. Gordhan’s application exposed some R6‑billion in alleged questionable money transfers by some members of the Gupta family or their companies. They have repeatedly denied wrongdoing and are challenging the matter, which is scheduled to be heard in the high court in Pretoria in March.
Habib Overseas Bank has branches in Johannesburg, Durban and Cape Town. It is controlled by Pitcairns Finance SA, a company registered in Luxembourg. Pitcairns is a registered banking institution that provides a range of banking products and services.
“The commission therefore found no overlap in the activities of the merging parties. [Habib Bank] is involved in banking services and Vardospan is newly created for the purposes of the proposed transaction. The individual that controls Cinq Holdings is involved in property, business and management consulting, metal processing, coal prospecting and mining.
The individual that controls Pearl Capital is involved in hotel and tourism, property and venture capital,” read the statement released by the Commission.