Guptas influence over Oakbay still a concern | Fin24
 
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Guptas influence over Oakbay still a concern

Apr 08 2016 17:39
Andre Janse van Vuuren and Franz Wild

Johannesburg - The Gupta family may have resigned from the management and board of Oakbay Resources & Energy, but questions remain over their influence in the company.

Oakbay on Friday announced that Atul Gupta stepped down as non-executive chairperson, while Chief Executive Officer Varun Gupta is also leaving the company.

President Jacob Zuma’s son, Duduzane, is also quitting as a director of the company’s Shiva Uranium unit.

The resignations follow a decision by financial-services groups including accounting firm KPMG LLP to drop Oakbay and other Gupta-controlled businesses as clients as questions about the family’s influence over Zuma mounted.

Senior ANC members last month alleged that the wealthy family offered them cabinet posts in exchange for business concessions, spurring probes by the party and the Public Protector, the graft ombudsman. The Guptas deny any wrongdoing.

Best interests

The “livelihoods of nearly 1 000 employees would be at immediate risk as a result of the outgoing director’s association with the company,” Oakbay said. “It would be in the best interests of the company, its shareholders and employees for them to step down.”

Apart from KPMG’s decision to part ways with the company, Sasfin Holdings ceased being Oakbay’s broker, while Barclays Africa Group’s Absa unit and FirstRand’s First National Bank, or FNB, stopped providing banking services, Oakbay Investments, a holding company that controls Oakbay Resources, said in a statement on Wednesday.

Oakbay Investments holds an 80% stake in Oakbay Resources, according to data compiled by Bloomberg.

“The question will still remain over the influence the Gupta family have over the board itself, even though they are no longer directors,” Mike Davies, an analyst with Kigoda Consulting in Cape Town, said by phone. “The scrutiny has been considerable over the course of the last few months. It doesn’t look like this is going to dissipate soon.”

Oakbay Resources Financial Director Trevor Scott will act as CEO, while Terence Rensen, a non-executive director, will serve as chairperson, the company said.

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