ON THE MONEY
STUART THEOBALD: How Oakbay’s listing provided a window into Gupta businesses
The suspension of Oakbay Resources from the JSE tells us something important about the nature of public capital markets and the disciplining effect they have on companies. Until the Gupta e-mail leaks, the listed entity in their empire was the only genuine insight we had into their activities. And that insight has long raised serious questions. The company owns the Shiva Uranium mine, which has been losing money since the Guptas acquired it in 2010. We know it has been losing money because Oakbay Resources had to publish audited financial figures.The share price mysteriously stayed high, quadrupling overnight in mid-2015. It stayed consistently above the IDC’s entry price, allowing the state-owned entity to report a profit on the position. This while the company was losing money and had no believable prospects of making any. In April, the JSE launched an investigation into some trades of the shares and handed data over to the Financial Services Board’s directorate of market abuse. I...
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