Sponsor ditches Guptas’ Oakbay
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.
“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.