Justifying the top-heavy composition of her company's
new BEE structure, ArcelorMittal (Amsa) chief executive Nku
Nyembezi-Heita this week said that "strategic" as opposed to
broad-based investors are included "where a company needs
assistance in a particular area".
For "strategic", read politically connected; for
"assistance", read lobbying with government. So what are the
lobbying fees, and to whom do they go?
An investment vehicle led by Duduzane Zuma, President Jacob
Zuma's 28-year-old son, will gain shares with a face value
approaching R1-billion, and Gugu Mtshali, reportedly Deputy
President Kgalema Motlanthe's romantic partner, will get
face-value shares plus cash totalling over a third of a
billion rand.
The investment company of Sandile Zungu -- a member of
President Zuma's broad-based empowerment advisory counsel
once tipped to be director general in the Presidency -- will
get shares with a face value approaching half-a-billion
rand. Ditto the Gupta family, friends and benefactors to
President Zuma.
The largest single benefit -- face-value shares and cash
totalling R2,2-billion -- will go to Jagdish Parekh, chief
executive of the Guptas' investment vehicle. He is
half-owner of Imperial Crown Trading, the upstart company
that was in a prime bargaining position after
controversially winning a stake in the Sishen iron mine that
previously belonged to Amsa.
Not out of pocket
Amsa, however, will not be out of pocket. Even though
the Ayigobi Consortium will get shares based on
ArcelorMittal's market capitalisation with a total face
value of R7,33-billion, their economic value appears to be
circumscribed by a floor of R728-million and a cap of
R1,67-billion, depending on ArcelorMittal's share-price
performance.
This means the benefit breaks down as follows:
- Duduzane Zuma-led Mabengela Investments (12,5% of
Ayigobi Consortium): shares with a face value of
R916-million, but economic value of between R91-million
and R209-million. Zuma is believed to own up to 50% of
Mabengela, which would give him personal economic value
of R46-million to R104-million.
- Gugu Mtshali (about 4,2% of Ayigobi): face value
about R300-million, economic value of between
R30-million and R70-million. As one of the owners of
Imperial Crown Trading, she also stands to get
R67-million in the related R800-million cash buy-out of
Imperial Crown's shareholders.
- Zungu-led Zico special purpose vehicle (6,25% of
Ayigobi): face value R458-million, economic value
R46-million to R104-million.
- Gupta family-owned Oakbay Investments (6,25% of
Ayigobi): face value R458-million, economic value
R46-million to R104-million.
- Jagdish Parekh (25% of Ayigobi): face value
R1,83-billion, economic value R182-million to
R418-million. As 50% owner of Imperial Crown, he also
qualifies for a cash pay-out of R400-million.
Parekh, Mtshali and other Imperial Crown shareholders had a
gun to Amsa's head because of their disputed Sishen mine
stake. But how did the Guptas get their stake, and how did
Duduzane Zuma's company get a stake twice as large as theirs
-- or, for that matter, twice that of Ayigobi "leader" Zungu?
Nyembezi-Heita told Moneyweb radio this week that the Guptas
had been cut in as "major facilitators" of the deal. An
Ayigobi spokesperson, who asked not to be identified, echoed
this, saying the Guptas had provided "advisory and
facilitation services".
Asked why the president's son's company should get a stake
as large as the Guptas' and Zungu's combined, the
spokesperson was stumped, saying: "I can see what you're
saying: Was there a greater contribution from Mabengela
[Investments] to warrant it? Or was it purely based on the
fact that he's the president's son that he qualifies for
that additional percentage? That I don't know. I cannot
answer you for sure."
How Amsa outwitted DTI
Funding the JZ Times
South Africa's DRC moment?
With acknowledgements to
Stefaans Brümmer and Mail and Guardian.
Is it possible to believe
this?
Stefaans wrote it so it is true.
JZ is now investigating corruption in other government
departments, but that's because other's corruption waters
down his family's share in the opportunities.
But hold on a second.
Is ArcelorMittal (Amsa) not the previous ISCOR, the Iron and
Steel Corporation of South Africa?
Indeed, the URL for the ArcelorMittal website is
http://www.iscor.co.za.
Was ISCOR not set up with taxpayers; money and owned by all
South Africans?
How did the new Bumiputerians sleight R7 billion of ISCOR to
an Indian billionaire who then gives 20% of it to the
president son, the deputy president's girlfriend and a few
hangers on?
Sitting there in the Union Buildings must be such a gas.
Surely absolutely no real government work whatsoever is
done.
They just sit there thinking of the next "BEE" deal they can
pull off and what a whopper it will be.
But this is actually not new, it was all conjured up in
Stockholm and Dar-es-Salaam in the 60s and 70s.
No night of the long knives for now, but economic uhuru
instead.
The white people's blood must not be split upon the ground
until they've been squeezed for every drop of equity.
Next it'll be the land.
Then it'll be the blood.
Mugabe, you're a saint by comparison.