South Africa: Gupta Family Announce Plans To Sell All SA Businesses

Aug 28, 2016

The Zuma-linked controversial business family, the Guptas have announced their plans to sell all their South African businesses including share and leave the country for good.

Atul Gupta was nonexecutive chairman of Oakbay Resources and Varun Gupta was CEO until both stepped down in April
Atul Gupta was nonexecutive chairman of Oakbay Resources and Varun Gupta was CEO until both stepped down in April

The family is in talks with “several international prospective buyers” and expects to make further announcements soon, it said in an e-mailed statement issued Saturday by its Oakbay Investments holding company and confirmed by family spokesman Gary Naidoo.

Oakbay Investments, which is controlled by the Gupta family, owns 80% of Oakbay Resources and Energy, a gold and coal mining company listed on the JSE, according to the resources company’s website. Other businesses include closely held Sahara Computers, a heavy-equipment supplier, a safari lodge, a television news channel and a national newspaper.

“As a family, we now believe that the time is right for us to exit our shareholding of the South African businesses which we believe will benefit our existing employees, and lead to further growth in the businesses,” the family said in the statement.

First National Bank, Standard Bank and Nedbank said in April that they would close some Oakbay-related accounts. Speculation about the Guptas’ influence over the president was fuelled after senior officials from the ANC in March alleged that the family offered them cabinet posts. That spurred a probe by the party, which was dropped, and another by the public protector. The Guptas deny any wrongdoing. Zuma has said only he has the authority to appoint ministers.

Although Zuma’s ties to the Guptas have contributed to divisions within the ANC, it’s difficult to speculate what implications the sale plans could have for the political landscape, Daniel Silke, director of the Political Futures Consultancy in Cape Town, said by phone.

“While the exit of the Guptas in the format that they have announced perhaps removes them directly, the real issue from my side is to watch whose hands these assets fall into,” he said. “What are the political linkages of the new masters?”

Political pressure

Atul Gupta was nonexecutive chairman of Oakbay Resources and Varun Gupta was CEO until both stepped down in April following what the company called a “sustained political attack”. Duduzane Zuma, the president’s son, resigned as a nonexecutive director of Shiva Uranium, a unit of the mining company, at the same time.

Some of South Africa’s largest banks said in April they would close Oakbay-related accounts, and the JSE said last month that it may suspend Oakbay Resources’ listing after it failed to replace Sasfin Bank as a sponsor within the required time. Sasfin quit as sponsor, KPMG as auditor and banks including Barclays Africa Group and First National Bank asked Oakbay and related companies to close their accounts, without saying why. The Guptas said the decisions were politically motivated.

Oakbay has since replaced KPMG with SizweNtsalubaGobodo.

“Since our decision to step down from all executive and nonexecutive positions in all our South African business in April 2016, the local management team has grown our businesses from strength to strength, with turnover and profits showing good growth and more jobs created,” the family said on Saturday in the statement.

 

 — Bloomberg

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