Spon­sor ditches Gup­tas’ Oak­bay

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

EM­BAT­TLED Oak­bay Re­sources is once again fac­ing the prospect of be­ing delisted from the JSE after its spon­sor, River Group, yes­ter­day made clear its in­ten­tion of sev­er­ing ties with the con­tro­versy-in­clined Gupta-owned com­pany.

Oak­bay, which only listed on the lo­cal bourse in 2014, now has less that three months to find a new spon­sor or run the risk of be­ing kicked off the JSE.

Ac­cord­ing to the JSE list­ing re­quire­ments, a com­pany has 30 busi­ness days to find a new spon­sor on the ef­fec­tive date of its pre­vi­ous spon­sor’s res­ig­na­tion, or face be­ing delisted on the Johannesburg bourse.

In a state­ment, Oak­bay said its spon­sor had in­di­cated its in­ten­tion to ter­mi­nate its re­la­tion­ship with the com­pany by July 31, due to the risk as­so­ci­ated with Oak­bay.

Risk cited

“River Group has given no­tice to the com­pany of the ter­mi­na­tion of their ap­point­ment as spon­sor. The rea­son for River Group’s ter­mi­na­tion of their ser­vices is due to their re­vised as­sess­ment of as­so­ci­a­tion risk sur­round­ing the com­pany and its share­hold­ers,” the com­pany said.

Oak­bay Re­sources, which owns Shiva Ura­nium and the Brak­fontein mine, is one of the min­ing sub­sidiaries that falls un­der Oak­bay In­vest­ments.

The com­pany last year con­firmed that five of its trans­ac­tions were im­pli­cated in the list of 72 trans­ac­tions re­ported to the Fi­nan­cial In­tel­li­gence Cen­tre men­tioned in former fi­nance min­is­ter Pravin Gord­han’s af­fi­davit that sought a declara­tory or­der that the min­is­ter could not in­ter­vene in the busi­ness of the Gup­tas and the banks that had closed Oak­bay’s ac­counts.

River Group be­comes the sec­ond spon­sor to ditch Oak­bay in less than a year. Last year, Sas­fin Cap­i­tal also ditched the group over state cap­ture claims against the Gupta family. KPMG also cut its ties with the com­pany.

Banks cut ties

This was pre­ceded by South Africa’s big banks, including Absa, Ned­bank, FNB and Stan­dard Bank hav­ing ter­mi­nated their re­la­tion­ship with the com­pany over the per­ceived rep­u­ta­tion risks of be­ing as­so­ci­ated with the Gup­tas and their busi­nesses.

The River Group walk­ing away from its re­la­tion­ship with Oak­bay comes weeks after the Gup­tas were once more pushed into the lime­light fol­low­ing un­re­lent­ing email com­mu­ni­ca­tions be­tween them and cabi­net min­is­ters and se­nior pub­lic of­fi­cials sur­fac­ing, that in­di­cated the ex­tent of the family’s con­trol over state mat­ters.

Fur­ther, the com­pany on Fri­day re­ported that it had suf­fered a loss of nearly R1 bil­lion for the year ended Fe­bru­ary, be­cause of an R880 mil­lion im­pair­ment recorded against its Shiva Ura­nium mine due to low ura­nium prices and re­duced gold out­put.

The group said loss at­trib­ut­able to own­ers was R570m in the pe­riod. The com­pany said that it was on the look­out for new spon­sors.

“Oak­bay Re­sources is in the process of iden­ti­fy­ing and ap­point­ing a new spon­sor.

“The ef­fec­tive date of River Group’s ter­mi­na­tion will not be ear­lier than July 31, 2017 and the share­hold­ers will be ad­vised in due course as to de­vel­op­ments in this re­gard,” the com­pany said.

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