Share

DA urges IDC to give Guptas 'a wide berth'

Cape Town - The Industrial Development Corporation (IDC) should “follow the lead of the commercial banks and give the president’s pals (the Guptas) a wide berth in future”, the Democratic Alliance (DA) said on Wednesday.

DA MP Michael Cardo was officially responding to Economic Development Minister Ebrahim Patel’s Parliamentary written reply regarding a loan restructure deal with Gupta-owned Oakbay Resources & Energy.

RELATED: DA slates IDC response on Oakbay loan restructure

In his reply, Patel forwarded IDC CEO Geoffrey Qhena’s response, who said “there were no political considerations associated with the restructure (and) the restructuring was done purely on commercial terms …”

Cardo said he took this claim “with a large bucket of salt”.

Qhena said “the interest of R257m, from April 14 2010 to May 31 2014, was converted into shares when the entity was listed (at a 10% discount to the listing price). The additional interest (after conversion) of prime plus 2% will be repaid as a lump sum on March 31 2018”.

RELATED: IDC met with Atul Gupta, but never at Saxonwold - CEO

Cardo said he will submit further questions to determine how much the portion of the loan swapped for equity would have been worth today had the IDC held Oakbay to its original terms.

“The DA will also seek further clarification from Qhena on what he means when he says the IDC’s pricing mechanism always takes into account both the level of risk and ‘developmental impact’.

“Mr Qhena acknowledged that there was a feverish flurry of meetings between IDC executives and Oakbay Resources & Energy shareholders, including Atul Gupta, in the run-up to both the granting and restructuring of the loan facility.

Political expediency

“It seems the IDC sacrificed commercial considerations on the altar of political expediency when it dished out favours for family and friends of President Jacob Zuma,” he said.

“The fact that the IDC coughed up R250m for Oakbay to buy Shiva Uranium in the first place – in April 2010 – smacks of political manoeuvring. The loan accounted for almost the entire R270m purchase price. And when the uranium mine was parceled out, a company part-owned by President Zuma’s son, Duduzane, took 26%, with the Guptas holding the rest.

“By December 2015 Oakbay valued Shiva at R10.7bn on a net-asset basis. This represented a 40-fold increase in value that put the Guptas and Zuma junior in the pound seats, but oddly had still not translated into repayment to the IDC.

“In fact, although the IDC loan was due to be repaid in full in April 2013 with interest amounting to a total payment worth more than R450m, Oakbay defaulted.

“Instead of foreclosing, the IDC bent over backwards to renegotiate repayment on terms wholly favourable to the Guptas," he said.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.97
-0.3%
Rand - Pound
23.97
-0.3%
Rand - Euro
20.48
-0.1%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.4%
Platinum
911.60
+1.6%
Palladium
1,012.97
+1.1%
Gold
2,214.54
+0.9%
Silver
24.90
+1.0%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders