The Gupta family’s Oakbay Resources has narrowly avoided being delisted from the Johannesburg Stock Exchange (JSE), having secured a new sponsor.
The company announced on Thursday that it has appointed River Group as its sponsor with effect from 1 September 2016.
River Group is a small financial company that has operations in Canada, Britain and South Africa. The company focuses primarily on corporate advisory mandates, and has a subsidiary, River Sponsors, which specialises in acting as a registered broker for JSE listings.
JSE sponsors are normally corporate brokers, banks and other professional advisers, and must undertake to the JSE that they accept certain responsibilities, namely to assist with applications and to provide advice, on a continuing basis, regarding the application of the Listings Requirements.
The sponsor is also a liaison between the company and the JSE – and any new sponsor will have to assess and deal with any concerns flags raised by the previous sponsor when it resigned.
The JSE said in its own statement that, in light of Oakbay’s announcement “the JSE wishes to confirm that it is no longer considering the suspension of (Oakbay’s) listing”.
Oakbay faced the threat of delisting after major South African banks blacklisted the group, while its former sponsors, Sasfin, and auditors, KPMG, took the decision to drop the company, citing reputational concerns.
Oakbay, and more specifically the Gupta family, found itself at the center of allegations of state capture, after deputy finance minister Mcebisi Jonas claimed that he was approached by the family, offering him the position of finance minister.
Further claims expressing similar stories soon followed. The Guptas are friends and business associates of president Jacob Zuma and are alleged to have used their connections with the president to unduly influence state arms.
The family has denied all the claims, and are yet to face any charges – though several group, including opposition parties, have laid charges against them with the SAPS.