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Cape Town – The National Union of Mineworkers (NUM) is adamant that the Gupta-owned Oakbay Investments won’t buy UBank, in which it has a 50% stake.
That is according to NUM general secretary David Sipunzi, who said Oakbay executives have been trying to convince them to sell it their bank, the Star reported on Thursday.
Oakbay, which has been blacklisted by South Africa's top banks, donated R1m to cover the costs of NUM’s central committee meeting this month, the Star revealed.
LATEST: Gupta-owned Oakbay responds to claims it's buying a bank
“We have been approached unofficially about selling UBank to Oakbay. (Oakbay Investments CEO) Nazeem (Howa) called me and I told him what our stance is and the official channels he should follow,” Sipunzi told the Star.
“Our stance is that UBank is not for sale. We’ll take all the necessary means to finance the recapitalisation; selling would be the last resort.”
However, the union knows it’s in a precarious position, as UBank requires R152m for recapitalisation within two years to keep its banking licence, the Business Day reported in June.
This emerged at the NUM’s annual central committee meeting two weeks ago, where Sipunzi indicated that there was an urgent requirement for the bank to diversify its revenue streams.
UBank’s management has also reportedly indicated that about R800m would be needed for the bank to invest in upgrading its systems and information technology infrastructure.
Business Day said the Reserve Bank had given the bank until June 20 to come up with a long-term capital-injection plan.
On Wednesday, Fin24 speculated that Ubank was the bank being targeted after Independent Media Online posted a teaser saying “the controversial Gupta family are making moves to acquire their own bank”.
What makes it an interesting fit is that 95% of UBank's clients are mine workers, which would link well with Oakbay Investments – through subsidiary Tegeta, which owns Optimum coal mine and Oakbay Resources and Energy, which owns Shiva uranium and have interests in gold mining.
Finance Minister Pravin Gordhan will have to approve the transaction if the company wants to buy more than 25%, Treasury spokesperson Phumza Macanda told the Star.
On Wednesday during SABC’s Morning Live breakfast show, which focused on the transformation of the SA economy and its obstacles, Sabelo Mgotywa, national secretary of the NUM Youth Structure referred to the issue of banks in South Africa.
"I'm not here to represent (the) Guptas or Oakbay, but I think South Africa can take the radical decision that we have taken (with the) Brics bank. We need to have our own bank in the country that can focus on the development of this country.
"If we continue to rely on the banks that we are having, for example Standard Bank, Absa, FNB (and) Nedbank, they are all controlled outside the country and we are not in charge of them.
"We need to be very radical. A typical example (is that) we've got PIC (Public Investment Corporation) and our money is being invested where we don't know as workers and we need to take control of that."
Ajay Gupta, like Mgotywa a member of the audience at the same event, spoke out for the first time on allegations of state capture, which he and his brother Atul have been accused of.
A close friend of President Jacob Zuma, Gupta said he is “not a lobbyist” or a “state capturer”.
He said he believes the idea of state capture is an imaginary concept created by the media. “It is mind capture, it is media capture,” he said.
“As far as I am concerned, I am a friend only (to Zuma),” he said.
Oakbay's auditor KPMG, the top four banks and Oakbay’s JSE sponsor Sasfin Capital all cut ties with Oakbay Investments in March amid rumours of alleged state capture and CEO Nazeem Howa has been on a mission to get the banks to rethink their move.
SizweNtsalubaGobodo has since taken over as its auditor, a key requirement for Oakbay Energy & Resources to remain listed on the JSE.
Cas Coovadia, CEO of the Banking Association of South Africa, said recently “an array of regulations”, including the Fica, compelled financial services institutions to conduct due diligence on clients, “particularly those of a substantive nature and those that are in the public domain”.
FNB, Standard Bank, Nedbank and Absa all acted “with total respect for client confidentiality and all relevant regulations,” the Banking Association South Africa told Bloomberg this year.
“Banks are one of the most stringently regulated businesses in the country because they hold public deposits in trust and must conduct business in a manner that does not introduce risks into the economy.”
The ministers tasked with intervening in the ongoing stand-off between Oakbay and the banks have yet to report back.
Oakbay and the Guptas declined to comment, an email to Macanda remained unanswered, while calls to Sipunzi and NUM's spokesperson were not answered.
