Cyril's Shanduka: R300m Lonmin deal above board

2014-10-03 21:54

Payments Lonmin made to its empowerment partner Incwala in the years leading up to the Marikana shooting were interest-free loans and not dividends, says Shanduka.

"The interest-free loans were paid to prevent Incwala from defaulting on its loan obligations, which would likely have resulted in the collapse of the structure and endangered Lonmin's mining licence and operations," said Shanduka CEO Phuti Mahanyele today.

Shanduka, the company started in 2001 by Deputy President Cyril Ramaphosa, was denying suggestions in a report in the Mail & Guardian that it received millions in dividends while Lonmin resisted the wage demands of workers.

It said the agreement preceded Shanduka's acquisition of a majority stake in Incwala in May 2010, and was meant to ensure that Incwala could meet repayments on bank loans taken out to buy a 26% stake in Lonmin's Akanani platinum project.

Shanduka, from which Ramaphosa stepped down as chairman before returning to active politics last year, maintained that to this day it has not made any money from its rescue of Incwala.

"Incwala has not declared any dividends since Shanduka's investment in 2010. Shanduka has to date therefore not received any benefit from this investment," said Mahanyele.

"Far from deriving any benefit, Shanduka has an exposure of over R300 million, which was the value of the cash investment made in Incwala."

The company rejected suggestions that it should have stepped in to help Incwala shoulder its loan obligations, saying these were incurred before it entered the picture.

"This commitment for Lonmin to help service the loan predates Shanduka's involvement. Shanduka had already spent R300 million towards this investment."

Shanduka also said the suggestions that the payment of loans to Lonmin was influenced by political considerations were "false, and could not be sustained".

Lonmin spokesperson Sue Vey could not immediately be reached for comment.

Ramaphosa has in recent weeks faced fresh political pressure over his links to Lonmin as the Marikana commission heard testimony on the company's financial arrangements.

These included payments of some R1.2 million to agents in Bermuda between 2008 and 2012, raising more scrutiny of Lonmin's claims that it could not afford to meet workers' demands in the strike that eventually claimed 44 lives.

As this emerged, the Economic Freedom Fighters called for Lonmin to be investigated for tax evasion, a few weeks after trying to raise the subject with Ramaphosa during question time in the National Council of Provinces.

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