The world is changing fast and to keep up you need local knowledge with global context.
In his trouble-free response to the State of the Nation debate, thanks to a boycott by the EFF, a confident President Jacob Zuma attacked those he says are damaging the country’s image. Zuma would be better served fessing up to what’s going on closer to his own home. In recent weeks, the global media has latched onto the story of how Optimum Coal was jimmied away from foreign group Glencore by the Gupta family. After arriving in SA in 1994 with R1.2m in their bank account, the Guptas have created an empire worth many billions, primarily through selling products into the public sector. Of late they been aggressively expanding their Sahara Computer base into mining, an area favoured by crony capitalists as the State controls and issues mineral rights. Insiders are appalled at what happened with the sale of Optimum Coal. They say among the Gupta tactics was calling in Eskom CEO Brian Molefe at the 11th hour to rip up a deal negotiated between his underlings and Glencore. Zuma’s newly appointed, Gupta-linked Mining Minister has also admitted to having been in Zurich at the time the Indian immigrants were negotiating the Optimum purchase with the Swiss-headquartered firm. Now comes a disclosure from Bloomberg that Zuma’s son Duduzane is the biggest shareholder in the Gupta company that has acquired Optimum. The blatant manner of this episode beggars belief. It wipes out years of effort by those propagating South Africa’s investment attractions to the global community. Capital is cowardly. It moves freely, but only flows to places where it feels safe and secure, staying far away from where it might be hijacked. What went down at Optimum Coal was a coup for Zuma’s network of patronage, but is proving particularly expensive for South Africa. – Alec Hogg
From Bloomberg News
(Bloomberg) — South African President Jacob Zuma’s son Duduzane is the biggest individual shareholder in a group that’s acquiring Glencore Plc’s Optimum colliery, a person familiar with the shareholding said. The group includes the Gupta family, whose links with the Zuma family have been criticized by opposition parties.
Tegeta Exploration & Resources Ltd. agreed to buy Optimum for 2.15 billion rand ($140 million) in December after Glencore had placed the mine under administration because it said it couldn’t make a profit because of the terms of a coal supply deal with state power company Eskom Holdings SOC Ltd. Tegeta is 64 percent owned by by Mabengela Investments, which in turn is 45 percent owned by Duduzane Zuma, the person said. That makes him the biggest individual shareholder in Optimum, the person said.
Oakbay Investments spokeswoman Yolanda Zondo said she couldn’t immediately comment when called by Bloomberg and requested e-mailed questions. Oakbay represents both Duduzane Zuma and the Gupta family, whose businesses have employed one of Jacob Zuma’s wives. Representatives of the family sit on at least 12 company boards with Duduzane Zuma, according to public filings.
The transaction is yet to be approved by South Africa’s Competition Tribunal.