Pay agent Terbium ditches Gupta-linked Oakbay
The desperation of the Oakbay group to keep its accounts at the Bank of Baroda open appears to have arisen from a decision by Oakbay’s third-party payment provider to cut all ties with the group, Business Day has learnt.
Other firms contracted to handle the service are not operational. Terbium Financial Services, which acted as Oakbay Resources and Energy’s transfer secretary on the JSE but resigned as state capture and money-laundering allegations swirled around the Gupta family, said it had severed ties with the group of companies.
Three others – Smart City Innovations, The White Lion and Option Rainbow Maritime – do not seem to be registered with the relevant bodies.
“When it became evident earlier this year of the sensitivities and conflicts of business interests in handling Oakbay as a client, Terbium immediately resigned the business, but we received legal advice that we would have to honour the contractual notice period which ended in August,” said Terbium CEO Andre van der Zee.
Evidence included by Manoj Kumar Jha, the Bank of Baroda’s acting CEO, in Oakbay’s bid to hang on to its bank accounts showed that Terbium, then known as Trifecta Capital, had entered into a minimum 12-month contract with Oakbay’s Ronica Ragavan on June 3 2016. This was for the provision of payment agent services, with a 30-day notice period if Trifecta terminated the contract early.
Trifecta charged Oakbay a premium for the “reputational risk” that the company and its subsidiaries were taking by providing the services.
By July 14, two months after the signed contract was due to expire, Terbium was still servicing Oakbay, with court papers showing it had requested Oakbay to transfer R5.7m so that it could pay Oakbay’s employees and suppliers. Oakbay then instructed the Bank of Baroda to transfer the funds.
“Our relationship with Oakbay was in line with all financial and legal requirements,” said Van der Zee, who took nearly a week to respond to Business Day’s queries on the matter.
“To confirm, Terbium has severed all ties with Oakbay,” Van der Zee said.
Terbium holds a category 1 licence granted by the Financial Services Board for the provision of intermediary services in the dealing of shares and deposits.
“According to our records, there are no complaints against this company,” said Financial Services Board spokesman Nokuthula Mtungwa.
It emerged during court proceedings that Oakbay had signed contracts with Smart City Innovations, The White Lion and Option Rainbow Maritime in July. None of the three companies are registered with either the Financial Services Board or the Payment Association of SA, which authorises or registers third-party payment providers who are not members of the Reserve Bank’s national payment system.
Smart City and The White Lion share a registered address at the same office park in Fourways in Johannesburg, according to Companies and Intellectual Property Commission records. Smart City was registered with the commission 1days after it signed the contract with Oakbay.
Calls to Smart City’s sole director, Renier Liebenberg, went directly to voicemail, and he did not respond to messages left for him.
The White Lion’s Maritza Fruin received Business Day’s messages, but hung up when the reporter followed up with a call.
The Bank of Baroda was due to close Oakbay’s accounts at the end of September, fearing reputational damage from the
Gupta family’s alleged involvement in state capture.
It had succeeded in dismissing Oakbay’s high court application for an interim order to temporarily keep its accounts open until Oakbay could make its case against their permanent closure in the main application in December.
Oakbay had argued it needed the accounts to pay its employees and suppliers, a contention Jha said was without foundation because it used Terbium for these services.
Jha also said the bank, with its two branches and 16 employees, did not have the infrastructural capacity to pay Oakbay’s more than 7,000 employees.
“Even assuming all of the applicants’ employees and suppliers are paid monthly as opposed to weekly, it is clear the bank would not be able to execute that instruction,” Jha said.
After the failure of its interim application, Oakbay applied to have the December application heard before the September 30 deadline for the closure of the accounts.
The high court’s Judge Tati Makgoka ordered the bank to keep the accounts open until his ruling by October 9.