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UPDATE 1-South Africa's Guptas to sell media stakes in bid to "clear name"
August 21, 2017 / 9:51 AM / 3 months ago

UPDATE 1-South Africa's Guptas to sell media stakes in bid to "clear name"

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JOHANNESBURG, Aug 21 (Reuters) - The main company owned by South Africa’s Gupta brothers, business friends of President Jacob Zuma, said on Monday it would sell its media assets - investments caught up in an influence-peddling scandal.

Oakbay Investments said the sale of its stakes in the New Age newspaper and the ANN7 television news channel would give its owners time to focus on clearing their name “in the face of unfounded media allegations”.

Senior members of the ruling African National Congress party have accused the Gupta family of using links with Zuma to wield influence and win business. Zuma and the Guptas deny any wrongdoing.

Oakbay did not go into further detail on the allegations of influence peddling that have rocked the government and drawn in several international firms.

But South African media reports have accused the Guptas of using their media arms to spread a divisive PR campaign backing Zuma. The Guptas have again dismissed the reports.

Oakbay, which also has interests in mining and computers, said it would sell its stake in ANN7 for 300 million rand ($22.74 million) and its holdings in the New Age for 150 million rand, to privately held Lodidox, a company controlled by former government spokesman Mzwanele Manyi.

“UNFOUNDED ALLEGATIONS”

“Under a new majority shareholder, Oakbay believes that both businesses and their employees will have the bright and prosperous future they deserve,” Oakbay said in a statement.

”The sale will also allow the shareholder the time to focus on clearing its name in the face of unfounded media allegations.

”The deal, which is expected to conclude over the next few weeks, would be funded by loans provided by Oakbay, Manyi said in a statement.

South Africa’s four largest banks have severed links with Oakbay, citing reputational risks in the wake of the scandal. Its listed entity Oakbay Resources and Energy has its lost corporate governance advisers, forcing it to delist from the Johannesburg bourse.

In May, investigative journalists at AmaBhungane, a non-profit group that has a strong track record of exposing what it says are government corruption scandals, started releasing some of more than 100,000 leaked emails and documents.

It said they show Gupta-owned companies unduly influence the awarding of government contracts worth hundreds of millions of dollars. Atul Gupta - one of the three Gupta brothers - has said the leaked emails are fake. Reuters has not been able to independently verify the allegations.

President Jacob Zuma has survived a no-confidence vote in the South African parliament on Aug. 9, though in an unprecedented revolt, about 30 ANC MPs sided with the opposition in the secret ballot. ($1 = 13.1950 rand) (Reporting by Tiisetso Motsoeneng; Editing by Andrew Heavens)

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