Patel orders Oakbay to pay back R293m

Cape Town - Minister of Economic Development Ebrahim Patel gave Gupta-linked company Oakbay Resources until midnight on Thursday to pay back R293m to the Industrial Development Corporation (IDC).

In a written reply to a Parliamentary question, Patel said that the IDC has R293m worth of equity in the firm.

This stems from an earlier loan it gave to the group before it listed on the JSE in 2014. After the listing the loan was converted into stock.  

Patel said that, following media reports earlier in the year that Oakbay and “persons and entities associated with it, engaged in unlawful manipulation of [its] share price” he launched an investigation. 

READ: IDC millions at risk as Oakbay share valuation becomes tricky

“Following that revelation I requested the IDC to advise on the accuracy of the claims, the remedies available to the IDC in the event of those allegations being true, and to identify steps to be taken to address the issue,” he wrote.

"In July, the IDC board appointed a legal team to advise it, led by Advocate Geoff Budlender SC, a respected member of the Cape Bar. Following an investigation by the legal team, and advice received from them, the IDC has now rescinded, alternatively cancelled, the Restructuring Agreement between itself, Oakbay Resources and other entities in the Oakbay Group," he said. 

Misrepresentations 

"The IDC asserts that various misrepresentations and breaches of warranties were committed by the Oakbay Group. The IDC has tendered the return of its shares in Oakbay Resources, and has demanded repayment of the outstanding capital and interest due to it, totaling approximately R293 million,” said Patel. 

Patel said that, if the sum is not paid by Thursday 23 November the IDC would “initiate proceedings against the parties concerned to recover the amount.”

“As the legal process has now commenced, it would be inappropriate to engage in a detailed discussion of the matter,” he added. 

Oakbay did not immediately reply to a request for comment.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
15.09
+0.1%
Rand - Pound
20.46
+0.1%
Rand - Euro
17.10
+0.3%
Rand - Aus dollar
10.84
+0.1%
Rand - Yen
0.13
+0.3%
Gold
1,836.16
+0.1%
Silver
24.17
-0.5%
Palladium
2,119.00
+0.4%
Platinum
1,035.50
+0.2%
Brent Crude
87.89
-0.6%
Top 40
68,186
0.0%
All Share
74,835
0.0%
Resource 10
74,924
0.0%
Industrial 25
94,147
0.0%
Financial 15
15,076
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot