Zuma’s son received stake in Tegeta weeks before it bought Optimum
by Franz Wild and Paul Burkhardt,
2016-03-07 12:18:25.0
A COMPANY that is almost half-owned by President Jacob Zuma’s son, Duduzane, obtained shares in a company founded by the Gupta family weeks before that company bought Glencore’s Optimum coal complex, share register documents show.
Tegeta Exploration and Resources, the company set up by the Guptas, agreed to pay R2.15bn for the Optimum mine, which supplies Eskom, in a deal announced on December 11. The purchase was announced three weeks after Duduzane Zuma took the stake in Tegeta.
The sequence of the transactions underscores complaints from President Zuma’s political opponents that he, his family and allies have benefited financially during his seven years as president. The controversy comes at a time when President Zuma is already under attack for unexpectedly changing his finance minister and shepherding an economy that is on the brink of having its sovereign credit rating being cut to junk status.
State capture
"It looks terrible," David Lewis, the executive director of transparency group Corruption Watch, said of the timing of the transaction. "There’s no explanation for this sort of stuff that’s persuasive. It goes to the capture of the state by business figures in connection with the political elite, right up to the president."
Calls to Duduzane Zuma’s office and cellphone were not answered, while Glencore officials declined to comment. Representatives for the Guptas and the Department of Mineral Resources denied any impropriety.
Bongani Majola, a spokesman for President Zuma, declined to comment. President Zuma said as recently as January 10 that he was friends with the Guptas, who since arriving in the country in 1993 have built a business empire ranging from computers and media to uranium mining.
African National Congress (ANC) secretary-general Gwede Mantashe has defended Duduzane Zuma’s right to pursue his business interests, saying in February that family members of politicians are entitled to a life of their own and are not just an extension of the politician.
Mineral Resources Minister Mosebenzi Zwane said in a February 8 interview that he helped complete the deal for the Optimum coal mine when he flew to Switzerland to meet Glencore CEO Ivan Glasenberg. Mr Zwane said that while he was not favouring Tegeta, he helped persuade Glencore to sell the operation, which was in bankruptcy protection, to try to save jobs.
Deal influence
On November 20, about half of the shares in Tegeta Exploration, the coal company until then controlled by the Gupta family and their employees, were transferred to Mabengela Investments, a company part-owned by Duduzane Zuma, and a company known as Elgasolve.
Oakbay Investments, a company owned by the Guptas, said Mr Zwane did not influence the deal. Oakbay owns 34.5% of Tegeta Exploration.
"The ministry of mineral resources was in no way involved in the acquisition of Optimum and was not party to the negotiations, nor was any other government minister, department or employee," Oakbay said in e-mailed responses to questions. "We are clear that our transaction was completed on an arm’s-length basis and governed by good corporate governance. The transaction was completed by a willing buyer and a willing seller following transparent negotiations between the parties over several months."
Mabengela owned 28.5% of Tegeta, Elgasolve 21.5% and a Dubai-based company called Fidelity Enterprises owned 15.5%, Oakbay said. It said it was not immediately able to confirm the date of the share transfers.
Peter Grauer, chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent nonexecutive director at Glencore.
Bloomberg
Duduzane Zuma. Picture: KATHERINE MUICK-MERE
A COMPANY that is almost half-owned by President Jacob Zuma’s son, Duduzane, obtained shares in a company founded by the Gupta family weeks before that company bought Glencore’s Optimum coal complex, share register documents show.
Tegeta Exploration and Resources, the company set up by the Guptas, agreed to pay R2.15bn for the Optimum mine, which supplies Eskom, in a deal announced on December 11. The purchase was announced three weeks after Duduzane Zuma took the stake in Tegeta.
The sequence of the transactions underscores complaints from President Zuma’s political opponents that he, his family and allies have benefited financially during his seven years as president. The controversy comes at a time when President Zuma is already under attack for unexpectedly changing his finance minister and shepherding an economy that is on the brink of having its sovereign credit rating being cut to junk status.
State capture
"It looks terrible," David Lewis, the executive director of transparency group Corruption Watch, said of the timing of the transaction. "There’s no explanation for this sort of stuff that’s persuasive. It goes to the capture of the state by business figures in connection with the political elite, right up to the president."
Calls to Duduzane Zuma’s office and cellphone were not answered, while Glencore officials declined to comment. Representatives for the Guptas and the Department of Mineral Resources denied any impropriety.
Bongani Majola, a spokesman for President Zuma, declined to comment. President Zuma said as recently as January 10 that he was friends with the Guptas, who since arriving in the country in 1993 have built a business empire ranging from computers and media to uranium mining.
African National Congress (ANC) secretary-general Gwede Mantashe has defended Duduzane Zuma’s right to pursue his business interests, saying in February that family members of politicians are entitled to a life of their own and are not just an extension of the politician.
Mineral Resources Minister Mosebenzi Zwane said in a February 8 interview that he helped complete the deal for the Optimum coal mine when he flew to Switzerland to meet Glencore CEO Ivan Glasenberg. Mr Zwane said that while he was not favouring Tegeta, he helped persuade Glencore to sell the operation, which was in bankruptcy protection, to try to save jobs.
Deal influence
On November 20, about half of the shares in Tegeta Exploration, the coal company until then controlled by the Gupta family and their employees, were transferred to Mabengela Investments, a company part-owned by Duduzane Zuma, and a company known as Elgasolve.
Oakbay Investments, a company owned by the Guptas, said Mr Zwane did not influence the deal. Oakbay owns 34.5% of Tegeta Exploration.
"The ministry of mineral resources was in no way involved in the acquisition of Optimum and was not party to the negotiations, nor was any other government minister, department or employee," Oakbay said in e-mailed responses to questions. "We are clear that our transaction was completed on an arm’s-length basis and governed by good corporate governance. The transaction was completed by a willing buyer and a willing seller following transparent negotiations between the parties over several months."
Mabengela owned 28.5% of Tegeta, Elgasolve 21.5% and a Dubai-based company called Fidelity Enterprises owned 15.5%, Oakbay said. It said it was not immediately able to confirm the date of the share transfers.
Peter Grauer, chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent nonexecutive director at Glencore.
Bloomberg
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