ALEC HOGG: Moneyweb‘s Lindo Xulu put together this package for us when he had a look inside Imperial Crown Trading. Listen carefully. He chatted with Sandile Zungu, Phemelo Sehunelo, both of those intimately involved in this saga.
LINDO XULU: Last week Tuesday ArcelorMittal announced its decision to buy Imperial crown Trading for R800m. The controversial deal created a handful of instant multi-millionaires – one of them ICT founder Advocate Phemelo Sehunelo. Moneyweb spoke to him prior to the deal’s announcement. I began by asking him why ICT, which is now part of a bitter legal battle over the ownership of Sishen’s mining rights, was formed in the first place.
PHEMELO SEHUNELO: The matter on ICT is sub judice, and we are not going to deliver a comment.
LINDO XULU: Despite numerous attempts to gain clarity behind the thinking of ICT, Sehunelo remained evasive, but eventually explained.
PHEMELO SEHUNELO: You are the founder, so when you start a company you found it with a certain aspiration for the company.
LINDO XULU: Well, what were your aspirations for the company?
PHEMELO SEHUNELO: At an appropriate time we will release all that … we started ICT for resource exploration.
LINDO XULU: Amongst the many controversies with ICT is the amount of shares held by Sehunelo. These have varied between 7.5% and 8.3%. However, when asked about this, Sehunelo replied.
LINDO XULU: Can I confirm your shareholding as 7.5%?
PHEMELO SEHUNELO: I don’t know why people are saying that. Just go to the certificates; you’ll see it.
LINDO XULU: I’d rather get it from you.
PHEMELO SEHUNELO: No, no, no.
LINDO XULU: There’s a variety of sources. How much do you own of ICT?
PHEMELO SEHUNELO: You see, out of 140 [sic] issued share capital I own 20%.
LINDO XULU: In a separate statement, ArcelorMittal announced that the BEE deal, which involved the controversial ICT, [was] led by the adviser to the President, Sandile Zungu. The deal was widely condemned for favouring a select few, including Zungu, Zuma’s son, Duduzane Zuma, and the wealthy Gupta family who are Indian nationals. Despite this, Zungu is adamant that the deal is in line with broad-based BEE principles.
SANDILE ZUNGU: Take us on our commitment that a significant portion of … will go to that broad base, which is still to be identified. We are not going to be unambiguous in our commitment in that regard. Yes, I agree it’s not been finalised, but it will be finalised.
LINDO XULU: And how soon will that happen?
SANDILE ZUNGU: In the fullness of time.
LINDO XULU: Which means what?
SANDILE ZUNGU: In the fullness of time means conditions precedent have got to be fulfilled in the respect that that’s one of the conditions precedent that ArcelorMittal will have to tick off on that aspect. When this transaction becomes unconditional, trust me, the broad-based aspects will be finalised.
LINDO XULU: Zungu also described his involvement in the deal as “easy money”.
SANDILE ZUNGU: … have said this transaction is “money for jam”. I was asked by a lady at Business Report – her opening remark was: “Sandile … started this transaction; it looks like money for jam.” And I said … who will say no to this transaction. In actual fact we expect to add a lot of value in this transaction. And she never said I said it’s money for jam. She said I also agreed. In other words, she said words into my mouth and then I said into the type of saying it’s not money for jam, I said who will say no to this transaction. So in a way, let me just clarify here, I don’t take issue with her. I’ve not even called to protest, but I just know it’s not in my nature to brag about easy money. It’s not in my nature to brag about the money that I’ve made, but I never said it’s money for jam.
LINDO XULU: So, instead of “money for jam”, it’s easy money?
SANDILE ZUNGU: It’s a very favourable transaction, I must tell you.
LINDO XULU: This is Lindo Xulu from Moneyweb Radio.
ALEC HOGG: Brilliant work there, Lindo. Well, whether it’s money for jam or not, it’d be very surprising why the Hilton College old boy who is defined as previously disadvantaged, will be adding value to a business that is pretty much a claim-jumper. Interesting. And Sehunelo is now worth R160m, given that R800m transaction by Mittal. It’s a strange country we live in.
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