Guptas inflated Oakbay share price on its JSE debut – report
This is reported to have taken place ahead of the controversial family's plans to raise funds for a uranium mine.
Ajay and Atul Gupta. File photo
The Gupta family reportedly inflated the share price of Oakbay Resources and Energy on its Johannesburg Stock Exchange (JSE) debut by lending money to a Singapore firm to be used to trade the equities, Bloomberg reports.
According to a November 20, 2014, communication – that was one of a trove of emails seen by Bloomberg – the Guptas are said to have agreed to loan $1 million from bank accounts in Dubai to Unlimited Electronics & Computers (UEC) in Singapore in November 2014.
This was followed by UEC transferring $928 146 to Oakbay in the same month and the two companies had a contract entitling UEC to 18.5 million Oakbay shares at R10 a share.
“The 2.31% stake in Oakbay was worth about R185 million. Oakbay employee Ronica Ragavan told UEC director Kamran Gani by email on Nov. 27, 2014, a day before Oakbay listed, to instruct his brokers to sell 10 000 shares for R10.05 each and another 10 000 shares for R10.08 before December 5.
“The 20 000 shares that traded on the Oakbay debut set the share price at R10.08, giving the company a market value of more than R8 billion. That was more than 48 times its full-year revenue. Most Johannesburg-based mining companies have revenue that exceeds their market value,” the report stated.
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