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Johannesburg - With reference to the piece published by City Press, “Taking a look inside Oakbay’s inner sanctum”, we want to note the following:
Oakbay Resources and Energy Limited (ORE) is fully compliant with the King III code on corporate governance and JSE regulations. Oakbay has strong independent directors and timeously issued a Sens announcement to inform the market of the meeting’s outcomes. The company can thus not be said to be acting “furtively”.
The AGM was not, as stated in the article, a private affair. ORE is a publically listed company and, accordingly, any member of the public who is a shareholder with a valid letter of representation is entitled to attend. ORE had specifically allocated time to handle media queries at the AGM once the voting had been completed. The author was always welcome to raise any question in that forum.
The article refers to the fact that “members” of the media were barred from the AGM. There was, in fact, only one member of the media present, who was the author herself. It was made very clear to her that management would make themselves available to her once the AGM voting had been completed.
We don’t believe that it is factually correct to describe the AGM as being “secret”, especially since the company released the results of the AGM voting on Sens within hours of the meeting.
The article states that the Industrial Development Corporation (IDC) voted against resolutions relating to financial assistance in order to prevent ORE from helping “unnamed” companies buy into ORE.
The purpose of the financial assistance resolution would typically relate to financial assistance from the holding company (ORE) to its subsidiary (Shiva Uranium).
Any reasonable person with knowledge of the listed company environment would know that a related party cannot buy into a listed company without specific preapproval from shareholders that are unrelated to the transaction.
The article states that more than R300 million in interest is payable by 2018. This figure is incorrect, according to our calculations.
The article further states that the original loan was converted to equity. This again is factually incorrect. Only a portion of the interest on the original loan was converted to equity. The principal portion of the original loan is being serviced by way of cash repayments in accordance with the provisions of the loan agreement.
Mr Varun Gupta is incorrectly quoted as saying the company was anticipating a 50 million ton global shortage of uranium, when in fact he referred to a 50 million pound shortage.
The reporter has used an “off the record quote”. As we understand it, off the record means off the record and not that the quote should be used without attribution.
The article misquotes the CEO as saying that the strategy is a long-term one in the context of the SA nuclear programme.
Mr Varun Gupta made it clear that ORE had no current plans regarding the SA nuclear programme due to the fact that any local build would be too far off in the future to suit the company’s plans.
The long-term strategy comment was linked to questions regarding short-term volatility in the share price and the company’s outlook on uranium prices. It would be unfair and inaccurate to attempt to link to the two, as the article has done.
The article states that there have been questions on the quality of coal produced by Tegeta. This is incorrect – the coal was tested by the SABS at the request of Eskom and found to be of acceptable quality.
* Howa is director of Oakbay Investments
