Swift sale of Gupta fam­ily em­pire in South Africa raises eye­brows

The Sunday Independent - - BUSINESS REPORT - Ka­belo Khu­malo

THE CRUM­BLING Gupta em­pire parted with as­sets val­ued at more than R3 bil­lion to lit­tle-known busi­ness en­ti­ties, rais­ing fears that the fam­ily was of­fload­ing the as­sets to peo­ple it could con­trol be­hind the scenes.

The rapid sale of as­sets come as the con­tro­ver­sial fam­ily came un­der in­creas­ing pres­sure to find new bankers as the Bank of Bar­oda, which is the last lender to hold the fam­ily ac­counts, gave no­tice that it would be shut­ting down the ac­counts next week.

The sale of Oak­bay’s me­dia and min­ing busi­ness raised fur­ther spec­u­la­tion that the com­pany was sell­ing the busi­nesses to them­selves.

On Mon­day, the fam­ily an­nounced that it had sold its 24-hour news sta­tion ANN7 and The New Age (TNA) for a com­bined R450 mil­lion to con­tro­ver­sial ex-govern­ment spokesper­son Mzwanele Manyi in a ven­dor fi­nance op­tion.

The deal was fol­lowed a day later by the dis­posal of Tegeta for R2.97bn to a Switzer­land-based busi­ness­man, with more as­sets ex­pected to be sold off in the com­ing days and months.

Oak­bay act­ing chief ex­ec­u­tive Ron­ica Ra­ga­van de­scribed the sales as con­sis­tent with the group’s com­mit­ment to pre­serve jobs, pro­vide cer­tainty and to al­low the Gupta fam­ily time to fo­cus on clear­ing their name.

The fam­ily in­di­cated last year it would be dis­pos­ing of all its South African as­sets in the wake of the damn­ing state of cap­ture re­port by former pub­lic pro­tec­tor Thuli Madon­sela and ma­jor South African banks and au­dit­ing firms sev­er­ing their ties with Oak­bay.

“As a fam­ily, we now be­lieve that the time is right for us to exit our share­hold­ing of the South African busi­nesses which we be­lieve will ben­e­fit our ex­ist­ing em­ploy­ees,” the fam­ily said.

“As such, we an­nounce to­day our in­ten­tion to sell all of our share­hold­ings in South Africa by the end of the year.

“We are al­ready in dis­cus­sions with sev­eral in­ter­na­tional prospec­tive buy­ers.”

The Gup­tas also lost sup­port of in­ter­na­tional banks, with the Bank of China and the Bank of Bar­oda also cut­ting ties with the com­pany.

Oak­bay was fur­ther dealt a blow early this year af­ter Var­dospan, a com­pany con­trolled by the Gup­tas’ as­so­ci­ate Salim Essa, failed in its court bid to force the SA Re­serve Bank and the Trea­sury to make a de­ci­sion on its ap­pli­ca­tion to buy Habib Bank in an R450m deal.

The cen­tral bank was adamant that Var­dospan had not pro­vided tax and fi­nan­cial in­for­ma­tion re­quired by the reg­u­la­tor.

The busi­ness com­mu­nity was, how­ever, not let­ting up on re­quests for a ju­di­cial com­mis­sion of in­quiry into state cap­ture al­le­ga­tions lev­elled against the Gup­tas to be es­tab­lished.

Jabu Mabuza, the chair­per­son of the CEO ini­tia­tive on Fri­day said the group­ing had told Fi­nance Min­is­ter Malusi Gi­gaba that Pres­i­dent Ja­cob Zuma would do well to es­tab­lish a state cap­ture com­mis­sion ur­gently.

The CEO ini­tia­tive was un­der­taken in 2015 at the re­quest of Zuma and his deputy, Cyril Ramaphosa, in light of the in­vestor cri­sis the coun­try was fac­ing to try to stave off credit-rat­ings down­grades and trans­form the econ­omy.

The sales come weeks af­ter the Trea­sury or­dered a foren­sic in­ves­ti­ga­tion into the Tegeta re­port which was handed over to the stand­ing com­mit­tee on pub­lic ac­counts (Scopa).

The Trea­sury said the in­ves­ti­ga­tion would look at whether Tegeta or its as­so­ciates of­fered any “grat­i­fi­ca­tion” to sus­pended Eskom chief fi­nan­cial of­fi­cer Anoj Singh and sus­pended in­terim-chief ex­ec­u­tive Mat­shela Koko, or any other govern­ment of­fi­cial, to im­prop­erly in­flu­ence de­ci­sions, and whether these amounted to an abuse of power and a vi­o­la­tion of the Preven­tion and Com­bat­ing of Cor­rupt Ac­tiv­i­ties Act.

Other ar­eas the in­quiry would look into was whether Tegeta was in­volved in or­gan­ised crime and whether the com­pany re­ceived any con­fi­den­tial in­for­ma­tion from Singh, Koko or any


Oak­bay de­scribes the sale of its me­dia and min­ing in­ter­ests as a bid to pre­serve jobs and al­low the Gup­tas to clear their name.

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