Did dodgy loan boost Oakbay listing price?
JUST weeks before the Guptas listed their investment vehicle Oakbay Resources & Energy in November 2014, the family lent an associate $1-million to buy shares in the entity in an apparent bid to boost the price of the stock before its debut.
Details of the loan to Unlimited Electronics & Computers, a company based in Singapore, were not declared to other shareholders, thus prejudicing them. Furthermore, the South African Companies Act requires shareholder approval for issuing shares to a person related to the company.
Unlimited Electronics has close ties to the Guptas through owner Kamran Raj Radiowala. Radiowala was MD at electronics company SES Technologies in India, which was owned by Sahara Computers.
Sahara Computers CEO Ashu Chawla was a director of Unlimited Electronics before he resigned in 2015.
Leaked Gupta e-mails show that Radiowala wrote to the Gupta brothers requesting the funds. Based on the average rand/dollar price during 2014, the loan amounted to just under R11-million.
“We request that you please make the loan advance payment as per our Loan Agreement . . . Kindly make the full electronic transfer to the account listed below,” said Radiowala.
He sent the same message to another Gupta associate, Sanjay Grover, a director at Fidelity Enterprises. This is a company based in Dubai with shares in Mabengela, a company owned by the Guptas and President Jacob Zuma’s son Duduzane.
Oakbay financials, sent to Tony Gupta by its then chief financial officer and now CEO Ronica Ragavan, show Unlimited Electronics paid $498 883.84 for shares in Oakbay between November 19 and 21.
Oakbay’s listing on the JSE was approved on November 21. The price was R10 a share.
Oakbay made its official debut on the JSE a week later, on November 28, at R10.05.
The shares rose to a high of R50 in May 2015 — on a day when only 10 shares were traded.
Oakbay shares now trade at R5.80.
On the eve of Oakbay’s debut, Ragavan drafted an e-mail on behalf of Radiowala informing the banking and financial services group Sasfin that he wanted to sell 10 000 shares in the resources company at a strike price of R10.05, which was valid until the first week of December 2014.
Ragavan gave a separate instruction to sell a further 10 000 shares at R10.08 a share in the same week.
It is not known if the sell orders were executed, or if Radiowala made a profit on the transaction. Ragavan declined to comment when contacted on Friday.
The leaked e-mails reveal Radiowala and the Guptas had a long-
Sahara booked Radiowala into the Oberoi hotel in Dubai and arranged for him to be chauffeured
term business relationship, and he travelled with the family in their private jet.
There is also correspondence showing that Sahara booked Radiowala into the Oberoi hotel in Dubai and arranged for him to be chauffeured in a Jaguar. The company also paid for Radiowala to visit South Africa in October 2014.
Sasfin pulled out of its relationship with the Guptas last year when major banks closed the family’s business accounts, citing suspicious transactions.
Sasfin spokeswoman Cathryn Pearman said its termination of the relationship “was for strategic reasons, as stipulated in our media statement at the time of the relationship with Oakbay coming to an end”.
She said Sasfin had no insight into the Guptas’ share trading.
The Guptas did not respond to questions sent to their lawyer Gert van der Merwe and Oakbay’s communications team.