First National Bank is the latest company to close its accounts with Gupta-owned investment company, Oakbay, amid a scandal over its relationship with president Jacob Zuma, and allegations of an attempted state capture by the Indian family.
“Oakbay has received no reason whatsoever justifying FNB’s actions. We are already in the process of moving our accounts to a more enlightened institution,” Oakbay said in a statement on Wednesday.
FNB joins Absa, Sasfin Capital and auditing firm, KPMG, in cutting ties with the Gupta’s listed company, Oakbay Resources & Energy.
City Press reported on Sunday that the actions of KPMG, Sasfin and Absa left the R10 billion company without its auditors, its sponsor and its banker, the paper said.
KPMG terminated its business relationship with the Gupta business empire last week due to the political storm surrounding the family’s friendship with President Jacob Zuma.
KPMG was the auditor for all Gupta-owned and-controlled businesses and performed a variety of other services for the Guptas, who are allegedly at the heart of a ‘state capture’.
Oakbay however, said in a note to the JSE on Tuesday 5 April:
“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.”
“In our view, the association risk is too great for us to continue,” KPMG chief executive Trevor Hoole reportedly told staff in an internal email.
“There will clearly be financial and potentially other consequences to this, but we view them as justifiable.”
Sasfin, which cut ties last month but will stay on until June 1, said it had taken a decision “to align Sasfin Capital’s corporate finance division’s strategic objectives” with the broader group.
City Press noted that Oakbay is obliged to find a new JSE sponsor within 30 days and a new approved auditor, under the exchange’s rules.
Oakbay Resources said that it is in the process of identifying and appointing a new auditor and sponsor.