JOHANNESBURG – Oakbay Resources and Energy, which is owned by the controversial Gupta family, on Monday lost its JSE sponsor, River Group, after being given notice of the termination of their appointment as sponsor.
River Group is a JSE sponsor, designated adviser and international corporate finance boutique with a 19-year track record.
The reason for River Group’s termination of their services with Oakbay were due to their revised assessment of association risk surrounding the company and its shareholders.
“Oakbay Resources is in the process of identifying and appointing a new sponsor. The effective date of River Group’s termination shall not be earlier than July 31 and shareholders will be advised in due course as to developments in this regard,” Oakbay said.
The Gupta family businesses have suffered a series of blows, including the loss of senior staff and banking facilities, amid allegations of political meddling and state capture.
All South African big banks, including Absa, Nedbank, FNB, and Standard Bank, have severed ties with the family’s business due to the perceived political risks of being associated with the Guptas.
Even auditors KPMG and sponsors Sasfin Capital resigned as Oakbay’s respective service providers this year over concerns about the family’s business activities.
Oakbay Resources is a JSE listed miner of energy-related resources, with a priority focus on uranium. The company mines gold deposits as a by-product and also offers outsourced contracting to the mining industry.
Oakbay is expected to report a loss of nearly R1-billion because of an R880-million impairment recorded against its Shiva Uranium mine due to low uranium prices and reduced gold output.