WANTED: Guptas' Oakbay seeking new auditor, sponsor

5 April 2016

Cape Town – Oakbay Resources and Energy is in the process of finding a new auditor and sponsor after KPMG and Sasfin Capital resigned as the respective service providers, it announced on Tuesday.

Oakbay said KPMG’s resignation occurred with immediate effect on 29 March, while the termination by Sasfin Capital would take effect from 1 June 2016 after receiving notification on 15 March.

Oakbay seems to have also lost its banker, Absa. At the time of Oakbay’s listing on the JSE in November 2014, Absa was Oakbay’s banker. However, an Absa spokesperson told City Press last week: “Absa Bank can confirm that we have no relationship with Oakbay Resources.”

The flight of corporate service providers comes as the Guptas' alleged business connection with and influence of President Jacob Zuma has resulted in calls of Zuma's recall, as well as an investigation into the Guptas' business activities.

“The reason for KPMG's resignation is solely based on their assessed association risk and KPMG have indicated that there is no audit reason for their resignation, whereas the termination of Sasfin's services follows a recent decision by Sasfin to align the strategic objectives of Sasfin's Corporate Finance Division more closely with that of the broader Sasfin Group,” Oakbay said in a statement.

“Oakbay Resources is in the process of identifying and appointing a new auditor and sponsor.”

Fin24 exposed the first revelation of corporations cutting ties with Gupta-owned firm on Friday, after publishing an internal staff letter by KPMG Southern Africa CEO Trevor Hoole.

“The recent media and political interest in the Gupta family, together with comments and questions from various stakeholders … has required us to evaluate the continued provision of our services to this group,” Hoole said.

“We have decided that we should terminate our relationship with the group immediately,” he said. “I can assure you that this decision was not taken lightly, but in our view the association risk is too great for us to continue.

“It is with heavy hearts that we have reached our conclusion, and there will clearly be financial and potentially other consequences to this, but we view them as justifiable.”

Both KPMG and Oakbay Investments confirmed the termination last Thursday.

The Guptas own Oakbay Investments, which is a shareholder in a number of private equity investments and joint ventures, such as Sahara Computers, JIC Mining Services, Shiva Uranium, The New Age newspaper, ANN7 TV and Clifftop Lodge.

This article first appeared on Fin24, see here.