Plea for workers to buy out Ubank

Atul and Ajay Gupta. The Gupta family are aggressively wooing the shareholders of Ubank in a desperate bid to buy the financial institution to ease their banking woes. File picture: Karen Sandison.

Atul and Ajay Gupta. The Gupta family are aggressively wooing the shareholders of Ubank in a desperate bid to buy the financial institution to ease their banking woes. File picture: Karen Sandison.

Published Jun 26, 2016

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Labour Bureau

Johannesburg: Calls to establish a workers’ bank were bolstered this week as trade unions were urged to use their investments to bail out the financially strapped UBank.

The intervention was suggested by the SACP after it emerged Oakbay Investments, owned by the Gupta family, was making a play to buy the bank, which serves mainly mineworkers.

UBank is owned by Teba Trust, which is administered jointly by the Chamber of Mines and the National Union of Mineworkers (NUM).

Its trustees are hard-pressed to raise R1 billion to meet capital requirements and for growth.

They will be expected to table a recapitalisation plan to the SA Reserve Bank on July 1, when the trust will be obliged to reveal its new partners and details of the financing of the R152 million capital injection needed to retain its banking licence.

The NUM has made clear its intentions not to sell, especially to Oakbay, but it must find investors willing to finance the retail bank.

There was also talk within the union that its multibillion-rand investment company would be approached.

An NUM insider said while the idea seemed viable in the short term, it would have compex consequences in the long run should the NUM lose its status as a majority union in the mining sector.

The union has lost 40 percent of its members to rivals and job losses since the mining industry decline began in 2012.

“Imagine a situation where Amcu is a trustee and the NUM has invested money in the bank,” said the insider.

Cosatu said this week that it supported the SACP’s call that should the NUM fail to generate the capital, union investments would be the “next best alternative”.

The establishment of a workers’ bank is a long-standing Cosatu resolution, and if its affiliates seized the opportunity to take over UBank, the federation would be on its way to realising this objective.

Cosatu’s push for a worker controlled bank was meant to help the “missing” middle class by providing financial services such as home loans to workers who did not qualify for services at traditional commercial banks.

It also sought to transform the financial sector, which is predominantly owned and run by whites. UBank’s profile as a black-owned bank also makes it appealing.

The bank’s management said it planned to expand and some of the funds needed would be earmarked for this purpose. “UBank is looking to increase its customer base. Our vision is to be the bank of choice for workers, their families and communities,” said chief executive Luthando Vutula.

The SACP said the bank had to be defended.

“The NUM decision not to dispose off workers’ ownership of UBank is important. It stands diametrically opposed to apparently internal machinations to sell off workers’ property to the bourgeoisie to enrich themselves,” said the SACP’s Alex Mashilo.

The trade unions have only a small window to invest. Vutula said their recapitalisation plans were in the final stages and various other companies had shown interest.

“At this stage the bank cannot speculate on how the capitalisation programme will conclude, save to say the bank has made significant progress and hopes to discuss this with shareholders soon,” he said.

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