Indian businessmen
It took just 12 minutes on Friday for Oakbay Resources, the listed Gupta family corporate vehicle, to check the last compliance box for the financial year – after coming perilously close to forceful delisting just months ago.
It did so by literally getting back on script.
“I’m sensing there are no questions coming,” said company chairperson Terry Rensen, before closing off the annual general meeting, brief even by the rubber-stamping standards of such meetings.
For almost all of the meeting Rensen read from his copy of a printed text, with prominent indications in red where he was to pause after asking rote questions and notes for other directors on what motions they were to second.
As a result the documents that were to be considered at the meeting, notably its annual financial statements, were taken as read and the ordinary and special resolutions of the meeting were quickly “passed by the requisite number of votes”, Rensen announced.
Though it had every appearance of a drama enacted purely for the sake of the written record, the meeting put Oakbay in compliance with the requirement for listed companies to hold AGMs where shareholders can interrogate directors.
The Gupta family has outright control of Oakbay through shareholding, although patriarch Atul Gupta resigned as its chair in April. Chief executive Varun Gupta resigned at the same time, as did President Jacob Zuma’s son Duduzane Zuma as a director of a major subsidiary.
The Gupta family was represented by Nazeem Howa, who acts as head of the family’s interests. Howa had no questions for the meeting and, in keeping with a long-running policy, he would not answer Mail & Guardian questions on Friday.
The state-owned Industrial Development Corporation, the only significant institutional investor in Oakbay thanks to the part conversion of a loan it had extended the company into equity, had no questions either.
Shareholders voted almost unanimously to give directors powers to issue shares for cash, buy back shares, and extend loans and other financial assistance to related companies. These powers could come in handy as the Gupta family seeks to exit all their South African holdings, as they have vowed to do “by the end of the year”. Yet the same powers had been voted for by the board at its 2015 AGM, as part of standard provisions most companies make.
In late August Gupta family spokesperson Gary Naidoo said the family wanted to exit all investments for the sake of employees and the country and that “several prospective international buyers” were already lined up.
At the time Oakbay Resources, on paper a vast part of the family’s wealth, was in bad shape. With the AGM out of the way, however, all impediments to a continued listing on the JSE now appear to have been removed.
On the last day of August, Oakbay delivered what appeared to be a hastily assembled annual integrated report for the year ending February 2016 just seven hours before a JSE-imposed deadline to do so expired.
Two major sections of the report, on the market environment for uranium (which it plans to mine in future) and coal (a big part of its current business), were lifted verbatim from competing companies. After the M&G pointed this out the company issued a correction notice acknowledging those competitors as sources. Failing to do so had been a clerical error, it said.
A day later the company announced it had appointed River Group as its JSE sponsor, ending what dry corporate announcements had not quite managed to conceal as having been a tense search.
Oakbay’s previous sponsor, Sasfin Bank, had resigned with effect from the beginning of June, officially starting a 30-day countdown to find a replacement. It would ultimately take a search of nearly six months – despite what Oakbay at one point described as its “best endeavours” – to find a willing sponsor among the 29 currently listed as authorised.
By contrast it took Oakbay less than a month to replace auditors KMPG, which resigned at the end of March citing “association risk” because of questions raised about the Gupta family. The position, which comes with civil and even criminal liability in signing off on financial statements, was filled by SizweNtsalubaGobodo before the end of April.
Disclosure: The writer owns 10 shares in Oakbay Resources, worth a total of R180 at the time of writing. He attended the company’s annual general meeting as a voting shareholder, where he abstained on all resolutions