JOHANNESBURG/ZURICH | August 23, 2017:
The Gupta family agreed to sell their South African mining unit for $225 million on Wednesday, the second disposal this week from the company's portfolio of investments which have been caught up in an influence-peddling scandal.
The sale by the Gupta's Oakbay vehicle is part of plans announced a year ago to sell all their businesses in South Africa, after companies including the country's four largest banks severed links with Oakbay, citing reputational risks.
The Gupta family, business friends of President Jacob Zuma, are accused of using their links with the 75-year old leader to wield undue influence and win lucrative state contracts. Both Zuma and the family deny any wrongdoing.
Oakbay said it would sell Tegeta Exploration and Resources, whose mines supply coal to South African state-owned power utility Eskom, for 2.97 billion rand ($225 million) to a Swiss-based company called Charles King SA.
The sale is the second this week by Oakbay, which said on Monday it had agreed to sell its stakes in the New Age newspaper and the ANN7 television news channel to Zuma ally and former government spokesman Mzwanele Manyi.
Oakbay has been searching for a banking partner after Indian-based Bank of Baroda said it would also cut links with the Guptas at the end of this month.
The Guptas, who are in business with Zuma's son Duduzane, have said stepping aside as owners would help the company restore banking relations and preserve jobs.
Charles King is a little-known Lausanne-based company listed by Switzerland's company register Moneyhouse as involved in trading in clothes and shoes. Oakbay said it had been acquired by Amin Al Zarooni, who it said was a leading businessman in the United Arab Emirates, as a special purpose vehicle for investments such as Tegeta.
"Mining is an excellent growth sector on the continent and with this acquisition, our expansion plans on the African continent kick starts," Oakbay quoted Al Zarooni as saying.
To underscore his credentials, Oakbay also set out a list of what it said were his global commodity businesses and said he was an active participant in global private equity markets.
The deal with Charles King has the support of mines minister Mosebenzi Zwane. "The Department welcomes the undertaking to save employees' jobs in Tegeta's various operations," his office said in a statement.
The three Gupta brothers moved to South Africa from India at the end of apartheid rule in the mid-1990s and went on to build a business empire stretching from technology to mining.
They are now embroiled in a scandal which has drawn in several international companies, including Germany's SAP, and deepened a divide in the ruling African National Congress, with some senior members calling for Zuma to resign.
(($1 = 13.2219 rand))
(Source: http://www.business-standard.com/)