Business

JSE moves to suspend Oakbay

2016-07-17 15:00

The majority Gupta-owned Oakbay Resources & Energy is facing suspension from the JSE after failing to secure a sponsor.

Oakbay was given 30 working days to find a new JSE-approved sponsor after its previous sponsor, Sasfin Bank, cut ties with the company from June 1.

On Friday, Oakbay issued a statement confirming that despite its best efforts, it had not been able to persuade any of the 28 other JSE-approved sponsors to accept the company as a client.

“[Despite] the fact that the company has utilised its best endeavours since Sasfin’s resignation to find a replacement sponsor, the company has been unable to do so ... This is despite the company remaining compliant with the JSE listing requirements,” read Oakbay’s official announcement to shareholders.

Following the announcement, the JSE confirmed that it was considering suspending Oakbay’s listing.

“Oakbay has advised the JSE it was not able to appoint a sponsor by close of business on July 14 ... As a result, Oakbay’s listing is now under threat of suspension,” said Andre Visser, general manager of issuer regulation at the JSE.

“The JSE strictly enforces its listings requirements and takes appropriate action where necessary to protect investors where there are breaches. At this point, the JSE is engaging with the company ... and accordingly, informed Oakbay that it is considering a possible suspension,” Visser said.

In line with the Financial Markets Act, the JSE has now asked Oakbay “to show cause ... why the suspension of listing should not be effected”.

The Gupta family owns 80% of Oakbay Resources & Energy. The company’s major assets are Shiva Uranium in Klerksdorp, and Brakfontein, a coal mine in Delmas that supplies Eskom.

Although Oakbay’s shares are rarely traded, any suspension from the JSE could have an effect on the 3.57% stake held by the Industrial Development Corporation (IDC), worth an estimated R656.9 million.

“Obviously we are concerned about the possible suspension of Oakbay from the JSE,” IDC spokesperson Mandla Mpangase said late on Friday.

“We have engaged the company on this and have been assured that the company is engaging the JSE in this regard.”

Oakbay did not respond to requests for comment on Friday.

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