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Oakbay faces legal action as IDC to claw back R293m

Economic Development Minister Ebrahim Patel revealed on Thursday that the IDC had cancelled its loan agreement with the Gupta company.

FILE: Minister of Economic Development Ebrahim Patel. Picture: GCIS

CAPE TOWN - Oakbay Energy and Resources faces legal action by the Industrial Development Corporation (IDC) to claw back nearly R300 million it says it is owed in outstanding capital and interest.

Economic Development Minister Ebrahim Patel revealed on Thursday that the IDC had cancelled its loan agreement with the Gupta company.

The IDC took the decision after an investigation, triggered by allegations that Oakbay's share price was manipulated ahead of its listing on the Johannesburg Stock Exchange in November 2014.

Patel says the IDC will use all legal means available to it to recover the estimated R293 million it says it is owed by Oakbay.

But the IDC itself may face further questions about its decision to grant the Gupta company a loan in the first place.

Democratic Alliance MP Patrick Atkinson says alarm bells should have rung at the IDC much earlier.

“Our concern, that’s one of the reasons we’ve been questioning the IDC for the last two years on the committee about this loan, is whether they’ve been getting the repayments because this really raised a red flag for us as a party.”

It’s been reported that Oakbay failed to meet the IDC’s repayment deadline on Thursday.

Efforts to get a response from the company have so far been unsuccessful.

(Edited by Shimoney Regter)