Thu Oct 27 12:46:56 SAST 2016

Litany of letters: How Oakbay begged Gordhan to lobby 'intransigent' banks

Ernest Mabuza | 17 October, 2016 14:48
Pravin Gordhan attends a panel session at the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, Jan. 20, 2016.
Image by: Matthew Lloyd / Bloomberg

An exchange of letters that spanned four months shows the lengths to which Oakbay Investments went to persuade Finance Minister Pravin Gordhan to lobby “intransigent” banks on their behalf.

These letters are contained in an application before the high court in Pretoria‚ by Gordhan‚ where he seeks an order declaring that he is not by law empowered or obliged to intervene in the relationship between Oakbay companies and the banks.

Oakbay Investments chief executive Nazeem Howa penned several letters to Gordhan between April and September‚ imploring‚ offering apologies and highlighting the finance minister’s “strong pedigree as a liberation fighter”.

Gordhan appeared‚ by August‚ after a meeting and ongoing correspondence to have had enough.

“It is concerning that Oakbay still does not accept the Minister of Finance‚ in law‚ is unable to interfere with the relations between registered banks and their clients‚” he wrote to Howa.

In the first letter written by Howa on April 8‚ he informed the minister about the “unexplained” decision of a number of banks to cease working with Oakbay companies‚ and said they were unable to pay more than 4500 employees.

In a letter on April 18‚ Howa apologised if his first letter to Gordhan came across in any other way other than a heartfelt appeal for assistance to save 7500 jobs within the group.

“Given your strong relationship with the captains of industry‚ I would implore you to help us save the jobs which‚ in addition to the personal benefit to the affected individuals‚ we believe is in the best interests of our economy and more broadly our country’s overall development‚” Howa said.

Gordhan wrote a letter to Howa after they met on May 24‚ pointing out that there were legal impediments to any registered bank discussing client-related matters with the finance minister‚ or any third party.

Gordhan said Oakbay had not exhausted all legal remedies‚ including approaching the courts for relief. Replying on the same day‚ Howa said Oakbay had been told by key regulators such as the Banking Ombud and the National Consumer Council that the complaint fell outside of their jurisdiction.

“Given this position‚ as well as the decisions of the responsible regulators‚ we seem to have no options open to us other than to appeal to you for assistance‚” wrote Howa.

On June 28‚ a letter was written by Oakbay subsidiary‚ Sahara Computers’ CEO Stephan Nel‚ warning that the firm was forced to make 140 employees redundant after its bank accounts were closed and the fate of 103 additional staff was in jeopardy.

“I humbly plead that you find some way to help us make a small start with our own employees.”

Howa wrote another letter on July 25 saying he would like to give Gordhan an update on the ripple effect the banks’ actions had on Oakbay and its operations “when we meet hopefully in the future”.

Replying on August 10‚ Gordhan said it was concerning that Oakbay still did not accept that the minister of finance was‚ in law‚ unable to interfere with the relations between registered banks and their clients.

Gordhan also said Howa had promised on May 24 to provide all relevant information from the banks and this had not been provided. Gordhan gave Oakbay a deadline of August 12 to make any further representations.

Gordhan received an email on August 17 informing him that Howa was out of the country and would respond formally upon his return to South Africa. On September 9‚ Howa said he was happy to share his full file of correspondence.

And that is where‚ according to the court file‚ the correspondence ended.

- TMG Digital


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