S. Africa’s Guptas, Allies of Zuma, to Sell All Local Businesses
S. Africa’s Guptas, Allies of Zuma, to Sell All Local Businesses
(Bloomberg) -- South Africa’s Gupta family, which has been accused of using its friendship with President Jacob Zuma for gain, said it will sell all of its South African business interests by the end of the year.
The family is in talks with “several international prospective buyers” and expects to make further announcements soon, it said in a surprise statement e-mailed on Saturday by its Oakbay Investments Ltd. holding company.
While Gupta family members stepped down from roles at companies including Oakbay Resources and Energy Ltd. earlier this year, there had been no public indication that a sale was being considered. The announcement comes about five months after senior officials from the governing African National Congress alleged that the family offered them cabinet posts, fueling speculation about how much influence the Guptas had over Zuma.
The allegations spurred a probe by the party, which was dropped, and another by the Public Protector, the graft ombudsman. The Guptas deny any wrongdoing. Zuma has said that only he has the authority to appoint ministers.
Oakbay Investments owns 80 percent of Oakbay Resources, a gold and coal mining company listed on the Johannesburg Stock Exchange, 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.
Zuma’s ties to the Guptas have contributed to divisions within the ANC, yet 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 non-executive chairman of Oakbay Resources and Varun Gupta was chief executive officer until both stepped down in April following what the company called a “sustained political attack.” Duduzane Zuma, the president’s son, resigned as a non-executive 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 Johannesburg Stock Exchange said last month that it may suspend Oakbay Resources’ listing after it failed to replace Sasfin Bank Ltd. as a sponsor within the required time. Sasfin quit as sponsor, KPMG as auditor and banks including Barclays Africa Group Ltd. 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 Sizwe Ntsaluba Gobodo.
The decision to step back from active roles following the banks’ decisions “hasn’t had the desired effect,” Oakbay Investments CEO Nazeem Howa said in an interview with eNCA, which was posted on the broadcaster’s website. Howa expects the family will stay in the country, he said.
“Since our decision to step down from all executive and non-executive 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 Saturday in the statement.
To contact the reporter on this story: Liezel Hill in Johannesburg at lhill30@bloomberg.net. To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Mark Williams, Steve Geimann