Ensure Gupta mine rehab funds remain
The Organisation Undoing Tax Abuse (OUTA) has called on the government to ensure the mine rehabilitation funds in the Guptas’ mining venture accounts with the Bank of Baroda are not tampered with and are ringfenced within the South African banking system, before the bank closes the Gupta accounts.
“We are concerned over the possible disappearance of billions of rand from these funds, which would be difficult if not impossible to retrieve, if indeed they have been misappropriated,” says Ben Theron, OUTA’s Chief Operating Officer.
On 25 August, OUTA issued a letter of demand to Mineral Resources Minister Mosebenzi Zwane, copied to the South African Reserve Bank, asking them to secure the funds and confirm this by 1 September. OUTA also wrote to the South African Revenue Service, as there are tax implications for unused rehabilitation funds, which include tax deductions for mining companies.
The two rehabilitation funds at risk are for Optimum and Koornfontein coal mines owned by the Gupta’s Tegeta Exploration and Resources and are together worth at least R1.75 billion.
“Minister Zwane had been given until Friday to respond to our demands. If he fails to meet these demands, we will hold him accountable and pursue an urgent interdict to force him to take action,” says Theron.
“Have you ever wondered what happens when a mine closes? We’ve all heard horror stories of people dying on derelict and abandoned mining sites. Well, according to the Mineral and Petroleum Resources Development Act, mines must contribute to a rehabilitation fund to ensure that the site is restored to its original state. This means making the site clean, safe and without any chance of pollutants or potential for injury,” says Theron.
“The impact on the health and safety of local communities living around the mines is potentially devastating, given the effect of acid mine drainage and possible contamination to underground water systems.
“The result of a mine closing with no rehabilitation fund meant that the South African taxpayer would have to pick up the rehabilitation costs of the mine, which would run into billions of rand.”
Minister Zwane has himself been linked to state capture, due to his past conduct and relationship with the Gupta family and consequently, in July this year, OUTA laid charges of treason and corruption against him.
In July, OUTA called on the financial authorities to investigate and take action against the Bank of Baroda and the Bank of India over their handling of Gupta-linked accounts. Soon afterwards, reports emerged that the Bank of Baroda had given the Guptas notice that their accounts were to be closed.
Last week it was reported that the Guptas are selling Tegeta for R2.97 billion to the little-known Charles King SA who has been linked to the Guptas in Amabungane’s #GuptaLeaks. Oakbay is also selling its media interests, the TV station ANN7 and newspaper The New Age to a business owned by Gupta ally Mzwanele Manyi.