Closure of Oakbay will result in increased unemployment numbers – BBC
JOHANNESBURG (miningweekly.com) – The Black Business Council (BBC) has urged all industry stakeholders to ensure that the jobs of employees working for Gupta-linked investment holding company Oakbay Resources are saved.
The BBC’s national council stated during a media briefing in Johannesburg on Tuesday that the significant increase in South Africa’s unemployment rate was cause for “major concern” and “urgent action” was needed by all social partners.
“We have noted that the unemployment rate increased to 26.7% in March from 24.5% in the previous quarter, which was well above the market expectation of 25.3%. This was the highest unemployment figure recorded since 2005,” highlighted BBC CEO Mohale Ralebitso, adding that the country was supposed to be growing opportunities in line with National Development Plan targets.
It was for this reason that government had to protect jobs wherever possible and why it called for a solution to be found with regard to the Oakbay matter, said Ralebitso.
All four major South African banks, as well as auditing firm KPMG, cut ties with Oakbay in April following allegations that its owners – the Gupta family – had “undue political influence” over President Jacob Zuma. This made it difficult for the company to undertake financial transactions and was a threat to its sustained viability.
“Although unverified, it has been reported that more than 16 000 jobs are directly impacted by the move by the banks, as Oakbay is unable to transact and pay wages and salaries to its employees.”
Ralebitso added that the company’s inability to pay its employees had a ripple effect, as the jobs of Oakbay employees were directly linked to their families who depended on them.
However, he stressed that, while the BBC did not want to see the closure of Oakbay, a solution had to be found that adhered to South Africa’s “strong” regulations and privacy requirements in the financial sector.
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