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Third attempt to wind up Oakbay heads to court

Rescue practitioners for other Gupta companies say it’s unable to repay R402m loan.

Business rescue practitioners for the eight Gupta companies under rescue have applied to the Johannesburg High Court for the winding up of Oakbay Investments, one Gupta company that avoided being placed under rescue.

The application is being brought by Tegeta Exploration and Resources and Islandsite Investments, both of which were placed under business rescue nearly two years ago.

Read: Swarm of court cases engulfs former Gupta mines 

This is the third time the practitioners have applied for the winding up of Oakbay. The first application in September 2018, claiming R2 million in rental and services owed by Oakbay to Tegeta, was withdrawn when the claim was settled. In February 2019 a second winding up application claimed Oakbay owed R3.8 million, but it too was withdrawn when the bill was paid at the last minute.

When Oakbay was initially unable to settle Tegeta’s above-mentioned R2 million claim, its acting CEO Ronica Ragavan admitted that the company was unable to pay, according to an affidavit by Kurt Knoop, one of the business rescue practitioners. Despite Oakbay later settling the claim, acknowledging being unable to pay constituted an act of insolvency.

This act of default triggered a claim for repayment of a loan of R402.3 million, a figure that was determined after an external forensic analysis.

The attorneys for the business rescue practitioners demanded repayment of the loan in September 2018, to which Oakbay replied that it was not liable. “The denial of liability was laconic in the extreme, without any elaboration,” says Knoop’s affidavit.

Read: Guptas inflated Oakbay price through trading by Singapore firm 

Oakbay formed part of the Gupta empire, and ran into trouble after SA’s commercial banks closed its accounts, citing reputational risk and the potential breach of banking regulations. The Gupta companies then relied on banking facilities provided by Bank of Baroda, which conducted a correspondent relationship with Nedbank. Bank of Baroda notified Oakbay of its intention to terminate its transactional banking facilities in 2017, and would thereafter close its SA branch. This left Oakbay and the Guptas without any banking facilities, forcing them into business rescue.

Oakbay was the holding company for the Gupta empire, and was reliant on its underlying businesses for survival.

Its main asset is Tegeta, which holds shares in four companies: Optimum Coal Mine, Koornfontein Mines, Optimum Coal Terminal and Shiva Uranium, all of which are under business rescue. Cumulatively, these companies owe R4 billion to creditors and are currently under care and maintenance.

Oakbay’s other assets include: Oakbay Resources and Energy, which had a share in Shiva Uranium; Westdawn Investments (whose sole source of income was from mining contracts it had with Optimum Coal Mine); and two labour broking companies.

The entire business foundation of Oakbay has failed and is unlikely to ever recover as a business, says Knoop.

Business rescue practitioners have been unable to access company records and financial statements for Oakbay.

As Moneyweb previously reported, the remnants of the Gupta empire are facing multiple court battles, one of them from Westdawn for the liquidation of Optimum Coal, and another from black-owned mining group Lurco, which is asking the court to interdict the sale of Koornfontein to Black Mining Royalties for a much lower price than Lurco is offering.

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Maybe our beloved Chief Justice needs to realize all is not well with the justice system. Must be embarrassing for him that the ANC came straight out and said that they cant leave stuff like EWC with them as their system take forever and does not work.

The CJ needs to stop galavanting all over the country giving Memorial Lectures and interviews and fix his problem.

He seems to have a tendency to think all is well and problems are elsewhere only. ITS NOT.

“He seems to have a tendency to think all is well and problems are elsewhere only. ITS NOT.”
Well, he is after all just another Presidential appointment and a government employee. If he thinks otherwise, he needs to show us he has balls. So far, he has displayed nothing. Show us some teeth CJ.

Delays and postponements continually in the judicial system undermines our justice system. Granting cheap bail does the same. If the evidence is overwhelming then No bail should be granted. In sequestration cases, no excuses for postponements should be allowed.

One example.

Malema’s Bloemfontein land grab case.

This started in 2014 and its just one postponement after the other.

If this does not show the judiciary is captured what will.

I know normally the NPA is blamed but “Madam” is still building capacity.

Unfortunately the CJ can not be absolved.

Amazing how the Guptas fled the country after Nasrec leaving cars, houses etc behind never to be seen again in SA. Is that the behaviour of a person of an innocent state of mind? Rest assured that they will never be extradited from the UAE because the moment the Guptas start testifying in court, they will spill the beans on everybody who had their hands in the till and that means 80%-90% of the ANC and the EFF. So extradition is never going to happen and even if someone kidnaps them and delivers at the NPA’s head office, the NPA will refuse to prosecute. The unity of the ANC comes before the country. End of story.

Maybe if they do come back they will have a car crash against a thick, immovable concrete bridge on the way from ORTIA?

Why are these gangsters not 1 year into a 50 year sentence yet!!

Don’t forget about the scores of advocates (teams of senior/junior counsel) and legions of attorneys and expert auditors who are milking these court processes for hundreds of millions of Rands – while thousands are jobs are at stake and our economy slumps ever deeper into the abyss – begs the question about state capture enablers, fees paid with the proceeds of crime, and questions of a lacking moral compass…we need a revamp of legislation dealing with white collar crime and the enablers protecting them!

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