The National Union of Mineworkers (NUM) warned the Gupta-owned investment – Oakbay, to stay clear of UBank as they would never allow the family buy-off the bank.
The union remained adamant that the Gupta-owned Oakbay Investments won’t buy UBank, in which it has a 50% stake despite all moves by the investment executives to convince them to sell it.
This was revealed by NUM’s general secretary David Sipunzi, who said the the Oakbay investments CEO Nazeem Howa had called him on several occasions.
“We have been approached unofficially about selling UBank to Oakbay. (Oakbay Investments CEO) Nazeem (Howa) called me and I told him what our stance is and the official channels he should follow,” Sipunzi said.
It was revealed that Oakbay which has been blacklisted by South Africa’s top banks donated R1m to cover the costs of NUM’s central committee meeting this month.
The Gupta family is aggressively wooing the shareholders of UBank in a desperate bid to buy the financial institution to ease their banking woes.
UBank has been under financial strain, with the Reserve Bank demanding that its shareholders come up with a recapitalization plan that will see them channeling at least R152m into UBank by next year.
“Our stance is that UBank is not for sale. We’ll take all the necessary means to finance the recapitalization; selling would be the last resort.”
UBank has a balance sheet of R4.3 billion and has been suffering major losses since the mining industry’s distress began in 2012 and NUM is well aware of its position in the bank position, as UBank requires R152m for recapitalization within two years to keep its banking license.
However, the divided union’s leaders seem to be at odds over the sale of the bank, despite a standing resolution in its central committee meeting this month to hold on to the bank.
Suspecting further moves by the Oakbay to ensure the sale of the bank, Num called on government to intervene in the situation for the sake of the miners and their families who would be affected by it.
“It is imperative the two stakeholders meet and resolve the issue of the (management) trust, which seems to be representing its own interest,” it said. “We also call upon the government to intervene and save the only black-owned bank in the country from falling into the hands of vultures.” the union said
Meanwhile, Treasury spokesperson Phumza Macanda explained that Finance Minister Pravin Gordhan will also have to approve the transaction if the company wants to buy more than 25%.
Macanda said this citing section 54(1) of the Banks Act, which states that “the minister must consent, in writing and conveyed through the registrar, to an arrangement for the transfer of more than 25 percent of the assets or liabilities
Based on these requirements, it unclear if Oakbay would meet the Reserve Bank’s requirements for it to own a bank if it has been rejected by existing banks.