Three weeks before a deal went through to buy Optimum Coal mines, shares in a Gupta-controlled mining group were transferred to a company part-owned by President Jacob Zuma’s son, Bloomberg reports.
In February, Glencore announced the sale of its Optimum coal mine to Tegeta Exploration and Resources, which is owned by the Gupta family and President Jacob Zuma’s son Duduzane.
Tegeta agreed to buy Optimum for R2.15 billion on 11 December – three weeks after Duduzane Zuma took a stake in the Gupta mining group, Bloomberg said.
The transaction is yet to be approved by South Africa’s Competition Tribunal. However, if it is approved, Tegeta will supply coal to three Eskom power plants: Hendrina, Komati and Majuba.
Who owns Tegeta?
Ownership of Tegeta drew headlines in 2015 when various media reports linked the company to both the Guptas and president Zuma, who has long had dealings with the family.
The Sunday Times reported in September 2015 that Eskom went to “extraordinary lengths” to see that the Gupta family scored a R4-billion coal supply deal from the parastatal.
At the time, Oakbay Investments, a group owned and run by the Guptas, repeatedly denied direct involvement in the mining company and its ties to the president, saying that it holds “less than 50% of the shareholding” in the group.
“Oakbay Investments, the family’s primary vehicle, holds less than 50% of the shareholding in Tegeta. So to place the Guptas in the headline is once again mischievous and misleading,” it said at the time.
However, according to share register documents seen by Bloomberg, on 20 November 2015, Oakbay transferred half the shares in Tegeta to Mabengela Investments – a company part-owned by Zuma’s son, Duduzane – and a company known as Elgasolve.
This took place three weeks before the Optimium deal went through.
Speaking to Bloomberg, Oakbay confirmed that Mabengela now owns 28.5% of Tegeta; Elgasolve owns 21.5%, and a Dubai-based company called Fidelity Enterprises Ltd. owns 15.5% – though the investment company did not confirm any transfer dates.
The remaining 34.5% is owned by Oakbay.
The group maintained that no government department or employee was involved with the Optimum deal. Glencore officials declined to comment on the matter, while Zuma could not be reached, Bloomberg said.
“It looks terrible,” David Lewis, the executive director of South African transparency group Corruption Watch, said of the timing of the transaction in a phone interview with Bloomberg.
“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.”