IDC risks losing millions as Oakbay announces end of JSE trading

By Matthew le Cordeur, Fin24

Cape Town – Oakbay Resources and Energy has officially been given permission to voluntarily delist from the JSE after failing to secure a transfer secretary and sponsor.

Its last day of trading will be on July 18 and its termination date on the JSE board will be on July 24, it said in a statement on Tuesday.

People walk near the reception at the Johannesburg Stock Exchange (JSE) in Sandton, Johannesburg, South Africa. REUTERS/Siphiwe Sibeko

The delisting will come as a blow to the Industrial Development Corporation (IDC), which has a 3.6% stake in the firm. The Guptas owned most the firm.

There are concerns about whether the IDC has the ability to recover its funds, following the conversion of a R256m loan to Oakbay into equity, corporate finance principal at Bravura Capital Melanie De Nysschen told Fin24.

The delisting announcement comes after Oakbay’s key service providers required by the JSE cut ties with the company and after final attempts failed to either retain or find a new sponsor and transfer secretary.

Terbium Financial Services said it would terminate its role as Oakbay’s JSE transfer secretary on 31 July, while River Group terminated its role as its JSE sponsor in June.

South Africa’s top five banks and its previous auditors KPMG cut ties with the firm last year already. The companies all cited reputational risk for terminating their services. The Guptas’ are embroiled in allegations of corruption linked to state tenders.

Oakbay said it “approached several JSE accredited sponsors and transfer secretaries, but has been unsuccessful in its efforts to fill the aforementioned vacancies”.

“Accordingly, Oakbay Resources is of the view that it is unlikely that it will be able to fill the vacant positions; which are mandatory in terms of the JSE Listings Requirements and the Companies Act, on a timely basis.”

Curiously, the Pretoria High Court on Tuesday had an urgent court application between Oakbay and Terbium Financial Services on its roll. No papers were served and no parties appeared before court, News24’s Alex Mitchley reported. The Guptas’ lawyer, Gert van der Merwe, was unaware of the matter, he told Fin24. Terbium did not respond to media queries.

The JSE agreed to grant Oakbay’s request to voluntary delist on Monday, it said.

“This decision by the JSE follows a careful consideration by them of all relevant facts and information at their disposal, and is based on the company’s inability to comply with the peremptory and material provisions of the JSE Listings Requirements, coupled with the fact that Oakbay Resources has indicated to the JSE that it is unable to continue to comply  with these requirements, as a result of the circumstances set out above.”

Oakbay’s shareholding structure consists of an 80% stake held by Oakbay itself, with just over 8.4% held by Action Investments, 5% by Saranya Investments, a Mauritius-based company, and a 3.6% shareholding by the IDC.