South African Labor Union Against Sale of Bank to Guptas

  • NUM says unwilling to sell stake to President Zuma’s friends
  • Board members tried to sell lender, union spokesman says

The National Union of Mineworkers said it will block the sale of its 50 percent stake in UBank Ltd. to the Gupta family, who are friends of South African President Jacob Zuma.

Oakbay Investments Ltd., owned by the Gupta family, has approached the labor union to sell its stake in the bank, the Johannesburg-based Star newspaper reported on Thursday, citing NUM General Secretary David Sipunzi.

The small retail lender, owned by a trust managed by NUM and the South African Chamber of Mines, is looking for investors to inject capital into the bank and isn’t willing to sell its entire stake, NUM Deputy President Joseph Montisetsi told Bloomberg. 

“This is the mining workers’ bank, it’s not going to be sold,” NUM spokesman Livhuwani Mammburu said by phone. “The Guptas will not succeed on this one. They tried. Even the CEO of UBank, with some board members tried to sell the bank, but it’s not going to happen."

Gupta Family Says South Africa Minister Meetings Not Problem

Oakbay Investments Chief Executive Officer Nazeem Howa’s mobile phone went unanswered when Bloomberg tried to call, while Gupta family spokesman Gary Naidoo did not immediately respond to an e-mailed request for comment. Howa declined to comment when contacted by the Star, the newspaper said.

Unsuccessful Approach

UBank is aware that Oakbay announced some months ago it made an unsuccessful approach to buy the bank, the Johannesburg-based company said in an e-mailed statement. The lender, which is seeking 1 billion rand ($69 million) to boost its capital levels and finance growth, said various companies have shown an interest in investing in the bank.

The lender is in talks with the South African Reserve Bank on the deadline for the capital injection plan, Chief Executive Officer Luthando Vutula said in an e-mailed response to questions.

South African regulators are seeking details from India’s Bank of Baroda of accounts belonging to businesses owned by the Gupta family, a person close to the bank with knowledge of the situation said June 13. The four biggest banks in the country said this year they would stop doing business with the Guptas, without saying why. KPMG LLP also halted its audits of Gupta-controlled companies.

Nedbank Group Ltd. Chief Executive Officer Mike Brown in March refuted a claim by the Gupta family that they tried to buy a stake in the lender but were turned down, saying he had no knowledge of it in the more than 10 years he had been with the company.

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