UBank won't need Guptas, has plan to stay afloat - Chamber
23 June 2016
Cape Town – UBank submitted its recapitalisation plan to SA Reserve Bank (Sarb) on Friday and will not require help from the Guptas, according to the Chamber of Mines.
The organisation is a joint trustee with the National Union of Mineworkers (NUM) of Teba Trust, which owns the bank.
“There is no talk of any bailout of any kind,” Chamber of Mines spokesperson Charmane Russell told Fin24 on Thursday.
NUM general secretary David Sipunzi said Oakbay Investments CEO Nazeem Howa tried to convince NUM to sell it their bank, the Star reported on Thursday.
Gupta-owned Oakbay needs a bank urgently as South Africa’s top banks have blacklisted the companies, after it was allegedly too risky due to suspicions over state capture.
“Our stance is that UBank is not for sale. We’ll take all the necessary means to finance the recapitalisation; selling would be the last resort,” Sipunzi told the Star.
Livhuwani Mammburu, acting NUM spokesperson, confirmed this position on Thursday.
“UBank is not for sale,” he told Fin24. “That’s the decision made by the NEC (national executive council) of NUM this month.
“It belongs to the mine workers,” he said. “We cannot betray the workers on the ground.”
"The Guptas will not succeed on this one," he told Bloomberg on Thursday. "They tried. Even the CEO of Ubank, with some board members tried to sell the bank, but it’s not going to happen."
Russell said the Chamber had not been approached by the Guptas or Oakbay.
Oakbay would need authorisation from Finance Minister Pravin Gordhan if they buy more than 25% of the bank.
UBank requires R152m for recapitalisation within two years to keep its banking license, the Business Day reported in June.
UBank’s management has also reportedly indicated that about R800m would be needed for the bank to invest in upgrading its systems and information technology infrastructure.
It had until June 20 to present a long-term capital-injection plan to the Sarb.
Russell said this plan was presented to Sarb on June 17.
“Work has been underway with UBank to fund the recapitalisation of the bank,” she said. “This process is ongoing.”
Oakbay declined to comment on the matter when approached for feedback on Wednesday.
This article first appeared on Fin24, see here.
