Gupta empire as threatened as Zuma’s cabal – another company ditches Oakbay

CAPE TOWN The damage done by the leaked Gupta-government e-mails, on top of the existing plethora of untested State Capture allegations is starting to hurt this unholy alliance – both politically and economically. The Zuptoid-captured ruling ANC has never been weaker while the Guptas’ business empire is taking financial hits of billions of rands as they’re increasingly viewed as business pariahs. Just look at one statistic for the 80% Gupta-owned Oakbay Resources; cash on hand dwindled from R225m in 2016 to just R2.7million this year. As the JSE probes now-cancelled Oakbay share trades made the morning after Pravin Gordhan was removed as finance minister, yet another company has bailed as its sponsor on the JSE in spite of strong earlier reassurances to the contrary. If you doubt that Gupta companies are near-pariahs, listen to what Oakbay’s former chief executive Nazeem Howa, says. Every single one of the JSE sponsors approached by Oakbay to support its listing rebuffed them, with the River Group (now out) reluctantly persuaded after a third or fourth round of supplication. Echoes of the Gupta’s pleading with Gordhan to prevent banks blacklisting their companies – before accusing him of being behind it. Sounds strangely like Zuma’s conspiracy theories. – Chris Bateman

By Matthew le Cordeur 

Cape Town – River Group has terminated its role as Oakbay Resources and Energy sponsor on the JSE, the Gupta-owned mining firm announced on Monday.

The River Group decision was based on its “revised assessment of association risk surrounding the company and its shareholders”, Oakbay said in a statement on Monday.

Oakbay Resources is facing mounting challenges as media houses publish daily exposés from the #GuptaLeaks, a database of between 100,000 and 200,000 emails that reveal behind-the-scenes communications of the Guptas’ many enterprises.

The family and their companies are the focus of intense scrutiny after allegations of state capture linking them to President Jacob Zuma, his son Duduzane and his political allies.

On Friday, Oakbay reported an operating loss of R1.279bn for the year to end-February 2017, from a prior loss of R1.5m. The firm’s cash on hand dwindled from R225m in 2016 to R2.7m in 2017.

In addition, the JSE is investigating Oakbay share trades after cancelling suspicious trades in the company’s shares on March 31 2017, the morning after Pravin Gordhan was removed as finance minister.

Oakbay Resources CEO Jacques Roux left the company on March 31 after one year on the job, while board member Mark Pamensky will leave this Saturday. George van der Merwe has assumed the role of CEO.

Sponsor headache

River Group’s termination will be a major concern for the Guptas, who battled to convince the sponsor to replace Sasfin, which also terminated its services.

Former Oakbay Investments chief executive Nazeem Howa said the group approached “every single” JSE sponsor to support the Oakbay listing, and the group was rebuffed by “every single one” of them.

Former Oakbay Investments chief executive Nazeem Howa. Photo: Waldo Swiegers/Bloomberg

“After the second and third round, River Group started coming around,” he said.

Oakbay said last year that it did not anticipate River Group would withdraw sponsorship, as Sasfin Capital did in May.

Sasfin joined auditors KPMG in terminating their services, citing the same reason of “association risk”. South Africa’s top banks also blacklisted all Gupta-owned companies in 2016.

SizweNtsalubaGobodo took on Oakbay as its new auditors, while the Bank of Baroda has managed its banking affairs.

Oakbay said it is in the process of identifying and appointing a new sponsor. “The effective date of River Group’s termination shall not be earlier than July 31 2017,” it said.

It will then have 30 days after this date to appoint a new sponsor, or it will be in breach of JSE regulations.

This breach nearly occurred last year, when Oakbay was battling to find a sponsor. City Press reported in 2016 that the JSE confirmed that it was considering suspending Oakbay’s listing.

“The JSE strictly enforces its listings requirements and takes appropriate action where necessary to protect investors where there are breaches,” Andre Visser, general manager of issuer regulation at the JSE, told City Press.

The Gupta family owns 80% of Oakbay Resources & Energy. The company’s major assets are Shiva Uranium in Klerksdorp, and Brakfontein, a coal mine in Delmas that supplies Eskom.

Although Oakbay’s shares are rarely traded, any suspension from the JSE could have an effect on the 3.57% stake held by the Industrial Development Corporation. – Fin24


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