E-mails: Guptas tried to buy social grants bank Grindrod
The embattled Gupta family contemplated a takeover of Grindrod Bank, the bank the South African Social Security Agency (Sassa) uses for its monthly payouts of R11bn in social grants, documents show.
Sassa uses Grindrod Bank to provide banking services to more than 10-million people.
Documents and e-mails that Business Day has seen show how the family‚ through their investment arm‚ Oakbay Investments‚ wanted to take over the bank in November 2014.
These details emerged amid a controversy over efforts by Vardospan‚ a company controlled by Guptas’ associate Salim Essa‚ to buy Habib Overseas Bank.
That bid is now off the table‚ as the offer to sell the bank expired at the end of March after it unsuccessfully turned to the courts to force a decision on its bid.
The contemplated Grindrod bid — “facilitated” by Vunani Capital‚ a shareholder of Grindrod Bank — came after the Bidvest bid failed to yield any fruit.
In an e-mail entitled “Grindrod Bank (Interest from Oakbay Investments)” that was sent on November 19 2014, Vim Rajbansi of Oakbay Investments’ Group Business Development wrote to Rajesh “Tony” Gupta that an exclusive memorandum of understanding that Bidvest entered into with Grindrod had ended with no deal being concluded.
She said that she was considering a letter of interest‚ “to see if we can pick this up at the right price”.
The e-mail contained an initial assessment of Grindrod Bank‚ the Grindrod Bank teaser‚ which was apparently provided by Vunani Capital, and a Grindrod Bank financial summary. “Vunani Capital is a shareholder in Grindrod and offered to facilitate the sale with us because of their close relationship‚” Rajbansi wrote.
She said Ajay Gupta told her to sign an official interest to start the negotiations. But that they had missed out when Bidvest put in an offer before them and signed the exclusive memorandum of understanding closing the process.
Rajbansi explained that since then, Oakbay had become involved in a bid process for 60% of UBank — which provides banking services to mine workers — which required the signoff of the Reserve Bank.
She said: “With Grindrod Bank being opened, there are now two banking licences available. This makes the process competitive for us.
“The high publicity surrounding the SASAA I-Net [presumably Net1] contract in the Grindrod Bank became a hurdle for Bidvest but not necessarily the case for us.
“In our Risk Assessment [we] agreed that Government will license Postbank to provide services and Grindrod will have to put a discount on this. We feel these factors make the deal highly negotiable in our favour.”
Rajbansi said that their aim had been to acquire a banking licence through a “neat and clean structure. We can do a neat deal with Grindrod … at less than half the price.”
She told Gupta that if this was “alright” with him, she would directly approach the Grindrod CEO.
In a follow-up e-mail sent to Tony Gupta just minutes later‚ Ravinda Nath‚ CEO of Tegeta‚ the mining investment company for Oakbay‚ said that Rajbansi had approached her with the proposal of the “Grindrod takeover”.
Nath said: “She wanted our feedback and comments and the way forward. I told her that she should talk to you first and if you instruct me & Satish to be involved in this deal we will certainly help you.”
Vunani Capital head Mark
Anderson confirmed on Tuesday that Oakbay had approached Vunani for an introduction to Grindrod as they had heard that Vunani published “sell-side” research of Grindrod.
“Vunani publishes equity research on Grindrod‚ which is independent analysis.”
He said that in terms of connections between Vunani and Grindrod, there were none, other than that Grindrod was the JSE sponsor to Vunani and provided compliance services to Vunani as required by the JSE.
“That is the full extent of the relationship,” Anderson said.
He said that there had been no meeting at that time and no introductions had happened.
“Public records clearly show that there was no facilitation or sale of this kind.”
Grindrod Bank MD David Polkinghorne said it was difficult to comment as “there was never an approach. We receive daily approaches and if there had been one by Oakbay, I would have been made aware of it.”
The Gupta family attorney Gert Van der Merwe said he would approach the family for a response.
PUBLIC RECORDS CLEARLY SHOW THAT THERE WAS NO FACILITATION