The country’s four major banks are in the dark as to when they are going to meet three government ministers tasked with intervening on behalf of Gupta businesses, including JSE-listed Oakbay Resources & Energy.
This week, the government assigned Finance Minister Pravin Gordhan, Labour Minister Mildred Oliphant and Mineral Resources Minister Mosebenzi Zwane to “engage” with the Big Four banks that have either cut ties with the Guptas, or are doing so.
This follows Oakbay losing its auditor KPMG, bankers including Absa and FNB, sponsor Sasfin, and the resignation of Oakbay’s CEO and chairperson.
Patty Seetharam, FNB spokesperson, said the bank had not been approached for a meeting with the three ministers.
“Absa notes the minister’s comments and confirms that no meeting has taken place, nor has an invitation to a meeting been received as yet,” said an Absa spokesperson.
A source in the banking sector said that there had been no contact between the banks and the ministers.
“It is an unprecedented move for the government to intervene in this way. This is creating a tricky situation,” the source said.
Minister in the Presidency Jeff Radebe told journalists this week that in its meeting held on April 13, the Cabinet noted the actions by the four banks related to the accounts of a company. He did not mention Oakbay or the Guptas by name.
Radebe said the three ministers would not be conducting an investigation. It was “a normal interaction” where ministers would meet with the banks’ representatives to get information.
“While Cabinet appreciates the terms and conditions of the banks, the acts may deter future potential investors who may want to do business in South Africa,” said Radebe.
He moved to reject any suggestion that the government may try to bully the banks, saying: “I think there are big boys and girls in the banks; they can never be bullied by anybody.”
SizweNtsalubaGobodo gave Oakbay a lifeline this week when it agreed to be the firm’s auditor.
Victor Sekese, CEO of the auditing firm, said his company was one of many bidding to be Oakbay’s auditor. “It is not as though it was handed to us on a platter. We had to bid.”
The other financial services providers that have dropped Oakbay as a client expressed the fear that their other clients were unhappy about being associated with the Gupta family.
“The professional standards do not require us to consult with other clients,” Sekese said.
“Because of the unusual public interest, we had to be more thorough,” he said in a telephonic interview with City Press, adding that more staff were assigned to performing a diligence exercise and previous auditor KPMG was consulted before SizweNtsalubaGobodo took on Oakbay as a client.
The ethical requirements set by the International Auditing and Assurance Standards Board were very specific, he told City Press.
With Sekese’s firm on board, Oakbay is in a race to get its latest financial results published.
Andre Visser, the JSE’s general manager of issuer regulation, said that Oakbay’s last financial year ended in February and the company needed to issue that result within three months – by the end of May.
But Visser said that the JSE provided listed companies with an extra month’s grace once the first three months had expired after the financial year-end.
During the fourth month, the JSE will engage a company that has not issued its results and by the middle of the fourth month, if the results have not been issued, the JSE will issue a public warning in this regard.
If, by the end of the fourth month, the company had yet to produce its results, the JSE would suspend its listing, Visser said.
Oakbay will also lose its JSE sponsor come June 1. It will need to find a new sponsor within 30 business days from the date that the relationship with the old sponsor ends.
This meant that Oakbay needed to find a new JSE sponsor by mid-July, or it would be in breach of the listing requirements, Visser added.
An executive from a JSE sponsor said: “Oakbay is likely to have approached all the JSE sponsors. Oakbay and the Guptas are controversial and many of the JSE sponsors are press shy. There is also a question of reputational risk. Sasfin is a respected company and KPMG even more so. I do not know where they [Oakbay] will find a sponsor.”
When City Press contacted companies listed on the JSE as sponsors, some – including PSG Capital and Sanlam Capital Markets – said they would not sponsor Oakbay. A Sanlam spokesperson said: “They are controversial politically and we would not like to get involved with that.”
The other companies refused to comment.
In a peculiar stunt aimed at garnering public sympathy, OakBay Investments this week issued an “open letter” purportedly from two Oakbay employees, Phuti Mosomane and Robbie Russo.
This letter caused ANC Youth League (ANCYL) leader Collen Maine to head to the firm in Midrand, but he was in for a rude awakening when he was heckled off the premises by employees whom he was scheduled to meet over Oakbay’s banking woes.
Maine later told reporters he had received an open letter from employees of Oakbay Investments – owners of The New Age and ANN7 media houses – who wanted him to address them about the company being barred from various banks. Maine said when he arrived, he met management, who told him that the employees were divided about his visit.
Maine was hounded by disgruntled employees, knocking off from work, for backing “Indian” people while his ANCYL had ignored their pleas for intervention regarding labour matters at Oakbay companies. Some shouted “Maine must fall”, while others looked on. The meeting never took place.