Old Mutual insurance arm drops Oakbay

SOUTH AFRICA: Old Mutual’s South African Insurance Arm Drops Oakbay, this comes after more South African companies, including a subsidiary of Old Mutual stopped doing business with Oakbay Investments, the company at the centre of a political influence scandal.

Companies began cutting links with Gupta-owned companies in December, when Barclays Africa’s retail banking business Absa quit as a banker for Oakbay Resources and Energy, a mining firm associated with the family.

Last month, Standard Bank, Nedbank, Sasfin and the local division of KPMG cut ties with the company, prompting Atul Gupta and Varun Gupta to resign as respective chairman and CEO Oakbay Resources and Energy.

In addition, South African fleet management company Eqstra has cancelled its car rental lease agreements with Oakbay with 14-days notice, the source said.

However Eqstra declined to comment on the same.

According to Business Day, Oakbay Investments’ CEO Nazeem Howa, who has been trying to restore banking ties, has said the company would not be able to pay its workers from June 7 if it cannot restore banking relations.

Oakbay Investments had failed to repair relations with at least two banks as of Tuesday, with one of them having already refused to meet the company executives led by Mr Howa, the source said.

Last month, the government appointed a ministerial team to find a solution to the stand-off. The team is due to report back on its progress at this week’s Cabinet meeting, Minister in the Presidency Jeff Radebe told Reuters.

"Government meets private sector all the time," Mr Radebe said. "Those who are talking about state capture need to explain that.

"As far as I am concerned, our government is not being captured by anybody at this present moment in time."
Source: Business Day