Radebe opens Oakbay can of worms
21 April 2016
Cape Town - Jeff Radebe, Minister for Planning, Monitoring and Evaluation, opened a can of worms on Thursday when he said three cabinet ministers held meetings with South Africa’s four big banks to get reasons why they decided to close the bank account of the Gupta-owned Oakbay Investments.
Mines Minister Mosebenzi Zwane, Labour Minister Mildred Oliphant and Finance Minister Pravin Gordhan met with the banks to find out why they don’t want to have a certain company as their client, Radebe said.
He said Cabinet is concerned that this move could deter future investors who want to open South African bank accounts.
"Cabinet noted the actions by the four banks that gave notice to close the bank account of a company," he said. "Whilst Cabinet appreciate the terms and conditions of the banks, the acts may deter future potential investors who may want to do business in South Africa.
"Cabinet has endorsed that the ministers of Finance, Labour and Mineral Resources should open a constructive engagement with the banks to find a lasting solution to this matter." The move comes as Oakbay announced it had found a new auditor - SizweNtsalubaGobodo - after KPMG cut ties with all Gupta-owend companies in April.
KPMG was joined by the top four banks and Oakbay’s JSE sponsor Sasfin Capital, who revealed they were cutting ties or had given notice to do so in March.
Oakbay Investments CEO Nazeem Howa told staff in the letter that the closure of its bank accounts “made it virtually impossible to continue to do business in South Africa”.
"Without bank accounts we may find ourselves in a position where we are unable to pay you‚ our valued employees,” he said. “We are doing everything in our power to ensure this does not happen.
“We find it totally unacceptable that you‚ our employees‚ and your families could potentially have to suffer as a result of the political campaign against us."
Oakbay has been trying to keep the focus on the 7 500 jobs at risk at Oakbay, while their owners - the Guptas - resigned from all positions and jumped on a plane to Dubai with a plane filled with suitcases.
In the meantime, Oakbay has managed get approval for its acquisition of Optimum coal mine from Glencore this month, paying R2.15bn to clear its debt.
During question time Radebe had to field a barrage of questions from journalists about the perceived “interference” of cabinet into the private sector.
One journalist asked Radebe how government could justify meddling in the affairs of banks, suggesting it came down to “bullying”. “Will you do the same for any other small business who has a problem with the banks?”
Another asked him if it’s “wise” to have Mines Minister Zwane as part of the delegation, given allegations of an untoward relationships with the Gupta family who owns Oakbay.
Radebe side-stepped the question about Zwane’s involvement, and merely said: “Yes, he is part of the delegation.”
As for cabinet’s perceived bullying of banks, he responded: “The banks are big boys and girls and there can never be any bullying where they are concerned.”
He maintained that the three ministers’ “interaction” with the four banks were “normal”.
“Government and the private sector meet all the time. There is nothing extraordinary about this.”
This article first appeared on Fin24, see here.
