Theto Mahlakoana and Mogomotsi Magome
THE Gupta family are aggressively wooing the shareholders of Ubank in a desperate bid to buy the financial institution to ease their banking woes.
This comes two years after the Guptas’ first attempt to buy Ubank failed, and months after all of South Africa’s major banks stopped doing business with the controversial family and its companies.
Independent Media can reveal that bosses of Gupta-controlled Oakbay Investments have been calling and meeting leaders of the National Union of Mineworkers (NUM) for weeks in a bid to convince the union to sell. NUM controls a 50 percent stake in Ubank, with the rest held by the Chamber of Mines of SA.
Oakbay’s Nazeem Howa expressed the company’s interest in the bank to the individual unionists after the union rejected its offer in 2014. This suggests the company’s bosses may have anticipated its subsequent troubles with the leading financial institutions.
Speculation is also rife in political and financial circles that the banks’ moves were related to fears over regulatory breaches of the laws governing the movement of money in and out of the country.
NUM general secretary David Sipunzi confirmed to Independent Media that Howa had contacted him on his cellphone.
“We have been approached unofficially about the selling of Ubank to Oakbay. Nazeem called me and I told him what our stance is and the official channels he should follow,” Sipunzi said.
Oakbay’s decision to resuscitate its mission to acquire Ubank, in light of their current woes, has the potential to send NUM into turmoil. The divided union’s leaders appeared to be at odds over the sale of the bank, despite a standing resolution by its central committee meeting this month to hold on to the bank.
The bank is in financial strain, with the Reserve Bank demanding that its shareholders come up with a recapitalisation plan that would see them channelling at least R152m into Ubank by next year.
Ubank has a balance sheet of R4.3bn and has been suffering major losses since the mining industry distress began in 2012.
Controversially, Oakbay made a R1 million “donation” to NUM to cover costs for its central committee meeting held earlier this month.
Independent Media has learnt this was the first time the company had made a financial contribution to the union, raising suspicion among NUM members and others in the labour movement that this was meant as a sweetener for the bank sale. This suspicion is reinforced by the timing of Howa’s aggressive lobbying.
Sipunzi said the organisation had no intention to bow to pressure. “Our stance is that Ubank |is not for sale. We’ll make all necessary means to finance the recapitalisation and selling would be the last resort.”
However, unionists who got wind of the developments feared the worst, saying that given the NUM’s instability, the Guptas might just get their way.
In a strongly worded statement after its NEC meeting in February, the union appeared to be suspicious about moves to sell the bank, whose main beneficiaries are mineworkers and their families.
“It is imperative the two stakeholders meet and resolve the issue of the (management) trust, which seems to be representing its own interest.
“We also call upon the government to intervene and save the only black-owned bank in the country from falling into the hands of vultures,” it said.
The transaction would have to be approved by Finance Minister Pravin Gordhan if the company aims to get more than 25 percent of the bank.
Treasury spokesperson Phumza Macanda cited section 54(1) of the Banks Act, which states that “the Minister must consent, in writing and conveyed through the Registrar, to an arrangement for the transfer of more than 25 percent of the assets or liabilities of a bank to another person”.
It is, however, unclear if Oakbay would meet the Reserve Bank’s requirements for it to own a bank if it has already been rejected by existing banks.
The Reserve Bank this week refused to divulge details of any transactions, but said the Registrar of Banks had a right to conduct a “fit and proper person” test on entities seeking to acquire a bank.
“The criteria for such a test includes, but is not limited to, fiduciary oversight capacity as well|as the background of the acquiring entity in terms of governance, integrity and soundness,” |said spokesperson Jabulani Sikhakhane.
Top members of the Gupta family, including Ajay and Atul Gupta and President Jacob Zuma’s son Duduzane, recently resigned as directors of Oakbay.
Howa refused to respond directly when contacted by Independent Media, and asked for questions to be e-mailed to Oakbay’s PR company.
These had not been answered before the publishing deadline.