ANC sits with ‘secret’ R50m from Hitachi Power Africa

2015-04-26 16:00

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Chancellor House, the ANC’s investment company, last year earned R50?million from its financial association with a company that is helping to build Eskom’s new power stations.

City Press’ sister newspaper, Rapport, learnt from a reliable source that Hitachi Power Africa (HPA), now trading as Mitsubishi Hitachi Power Systems Africa (MHPSA), paid R50?million to buy back Chancellor House’s 25% stake in the company last year.

The transaction took place shortly before the general election in May last year.

The amount of R50?million, which has been kept secret up to now, is separate from the estimated R50?million Chancellor House had received in dividends from HPA over a period of eight years.

It was also found that Chancellor House paid R1.25?million for its shares in HPA when it was appointed HPA’s BEE partner in 2005.

The total amount of R100?million Chancellor House has earned in its eight-year relationship with HPA amounts to a return on investment of 7?900%.

A source who was directly involved in the transaction said the negotiations to buy out Chancellor House’s shares started in August 2013 and were finalised in January last year.

On Thursday, the managing director of Chancellor House Holdings, Mamatho Netsianda, confirmed that the company had received R50?million for its stake in HPA.

In 2007, HPA won a tender of about R40?billion to produce pressure tanks for Medupi and Kusile, Eskom’s new power stations. Eskom has been heavily criticised because problems with the pressure tanks are partly responsible for the delays in the construction of the power stations. In 2008, the Public Protector ruled that there was a conflict of interest in Eskom’s awarding of the tender to HPA because Valli Moosa, then Eskom chairperson, was also a senior member of the ANC.

In 2010, Mathews Phosa, then treasurer-general of the ANC, gave instructions for Chancellor House to sell its shares in HPA because of a conflict of interest and also because it gave the impression that the ANC was “abusing taxpayers’ money to raise funds”.

When Chancellor House surrendered its stake in HPA last year, ANC treasurer-general Zweli Mkhize denied that the party might benefit directly from the transaction or that it could be used to fund the party’s election campaign.

A month later, as part of a panel discussion on the funding of political parties held by the Institute for Security Studies, Mkhize said Chancellor House should not have any direct interests in government tenders and, in future, should avoid situations that might give rise to conflicts of interest.

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