IDC decision malicious — Oakbay

Gupta-owned Oakbay Resources & Energy has described a decision taken by the Industrial Development Corporation to cancel an agreement with it as “spurious and malicious”.

Gupta-owned Oakbay Resources & Energy has described a decision taken by the Industrial Development Corporation (IDC) to cancel an agreement with it as “spurious and malicious”.

Last week, the IDC announced that it would sue the company after it failed to meet a demand to pay back R293m.

This was after allegations of unlawful manipulation of the Oakbay Resources & Energy share price in 2014 ahead of its listing on the JSE.

The Gupta family and its entities have consistently denied allegations of wrongdoing in the face of ongoing allegations of state capture and corruption.

The company has been in contact with the IDC, but denies it has done anything wrong.

“Oakbay has always strictly abided by all relevant financial rules and regulations and upheld all our obligations to shareholders,” it said in response to questions by Business Day. “We reject the IDC’s allegations and smears that are part of a wider attempt to discredit Oakbay.”

The IDC on Tuesday confirmed that Oakbay’s lawyers had responded to its letter of cancellation, that it denied breaching IDC warranties and argued the IDC was not entitled to rescind the agreements with Oakbay.

The IDC said it anticipated that the summons commencing action would be issued in the next few days.

The Guptas had approached the IDC for a R250m loan to buy their nonprofitable Shiva Uranium mine in 2010.

However, in 2013 the company asked for the loan agreement to be renegotiated and the IDC granted ORE a quasi-equity loan, for which the corporation received 3.56% shares in the company.

The IDC lost R90m when ORE shares fell and the company delisted from the JSE. The IDC was left with shares it could not sell.