South Africa’s Oakbay Investments will start setting up meetings with banks on Tuesday to try restore relations after the top four lenders cut links with the company amid speculation that its owners, the Gupta family, are wielding undue political influence.
Last week, several South African companies, including two major banks, cut ties with Oakbay following allegations over the Gupta family’s relationship with President Jacob Zuma.
Nazeem Howa, the CEO of Oakbay Investments, a holding company for Gupta businesses in South Africa, said he hoped to convince at least one local bank to re-establish relations.
Shares in Oakbay Resources & Energy dropped 16 percent on Monday, falling sharply for a second straight session after the sudden resignations of its chairman and chief executive.
“We will start setting up meetings with banks on Tuesday to try and restore those relations because the lives of 7,500 employees are at stake,” Howa told Reuters in an interview.
Howa said Standard Bank and Nedbank became the latest companies to sever links with the Oakbay late last week. The local unit of global auditors KMPG, citing association risk, ended their business ties earlier this month.
Other companies that have severed links with businesses linked to the Gupta family include investment bank Sasfin , Barclays Africa’s Absa and First National Bank (FNB), part of FirstRand.
“Absa used to be our main bank, they gave us notice in December and then we moved to FNB and they gave us notice two week ago now and Standard was our back up and it, along with Nedbank, gave us notice late last week,” he said.
The banks notices expire at the end of May, he said.
Although the Gupta’s relationship with Zuma has been a source of controversy for years, it burst into the open last month when senior figures went public to say the family had exerted undue sway, including offering cabinet positions.
Zuma has acknowledged the Guptas are his friends but denies anything improper. The Guptas, whose businesses stretch from media to mining, have denied the allegations and say they are pawns in a plot to oust Zuma.
The accusations that the Guptas have undue influence on Zuma, coupled with last week’s failed motion to impeach the president have weakened the leader who is beset by calls to resign ahead of local elections in August, which are likely to be a test for the president and his ruling party.
On Friday, Atul Gupta and Varun Gupta resigned as respective chairman and chief executive of Oakbay Resources and Energy , a company that houses the family’s mining assets, in response to what they said was a “sustained political attack”.
They were joined by President Jacob Zuma’s son Duduzane, who also said he would sell his investment in the business, in a bid to distance themselves from the holding company.
On Monday, Howa denied local media reports that the Gupta family had fled South Africa, saying they had travelled abroad to attend a family member’s wedding later this month.
The three Gupta brothers moved to South Africa from India at the end of apartheid in the early 1990s and went on to build a business empire that stretches from technology to the media to mining.