Tokyo’s Guinea deal stirs a storm

2012-06-23 10:16

Media reports in the West African state reveal that the ‘secret deal’ was never disclosed despite a promise for absolute transparency on state deals

Billionaire politician and presidential hopeful Tokyo Sexwale’s relationship with a Western Cape businessman has caused an uproar in Guinea.

Walter Hennig’s Palladino Capital 2, a company registered in the British Virgin Islands and has close association to Sexwale’s empire, did a $25-million (about R206 million) loan deal involving a state minerals company which has sparked a storm.

The British Sunday Times reported, and critics say, that the “secret deal” meant that if the state reneged on the loan, Hennig’s company could have claimed a 30% stake in a newly created Guinea state mining company.

Media reports in Guinea, a small West African state, have pointed out that the deal – signed by the nation’s mining minister and according to the agreement designed to assist establish the new state national mining company – was never disclosed by the government despite a promise in a new mining policy regime for absolute transparency and the publishing of state deals.

The reports also point out that the $25-million loan was never reflected in the nation’s budget.

The Guinea government denied this week that the agreement would have allowed Palladino Capital 2 to take a 30% stake in the new state mining company, insisting that the option to claim a 30% stake on default of the loan was restricted to an unnamed subsidiary of the state mining entity.

Hennig claimed this week the deal went sour and announced that his company was now claiming back the $25 million.

He too denied the deal would have entitled Palladino Capital 2 to a 30% stake in the state company.

However, City Press has a copy of a document which appears to be the same loan agreement referred to by the British Sunday Times. And this clearly allows Palladino Capital to convert this 30% stake into “all or part” of shares in the main state mining company.

Hennig, in the past 10 years, has led a number of companies in Sexwale’s Mvelaphanda empire, and his Palladino Group today is a joint-venture partner with Mvela Holdings in another initiative.

Sexwale declined to comment on his relationship with Hennig, Palladino and the Guineadeal.

He said through his spokesperson Xolani Xundu that he remained “placid” and would not confirm nor deny claims by “faceless sources”.
Since joining Sexwale’s inner circle about a decade ago, Hennig made his presence felt as corporate leader in the network of Sexwale-linked companies, making deals across South Africa, Africa, Europe and Asia.

South African online company records show Hennig has been, or is still, involved in more than 40 companies, registered in South Africa. He has built mansions across the Cape peninsula and has a luxurious villa in Clifton, which is registered in his name.

Some of his acquaintances say that Hennig and his similarly flamboyant father, Oloff, the “buchu king” of Piketberg, struggled at one stage to balance their books but that their lives changed dramatically after Hennig met Sexwale.

Today, Hennig hosts a yearly bash which has made headlines for its finery and free spending.

Dubbed “Walter’s Bash” at his Clifton mansion, the New Year’s party attracts top international and local celebrities. A recent one saw superstar R&B singer Akon perform.

But generally Hennig keeps himself out of the camera’s eye. Associates say he is obsessive about not being photographed or having details of his life posted online.

He also has close ties with Mvela Holdings – a joint-venture entity set up between Mvela Holdings, Hennig’s Palladin Group and another enterprise – chief executive Mark Willcox.

Willcox would not talk about the Guineadeal this week.

“I am not going to speak to you about the Palladino transaction. I will talk to you about any other transaction, but not this one,” he said.

Hennig senior has also been in the spotlight.

Back in the 1980s, he was known as a best friend of legendary British train robber Ronnie Biggs who, while in exile in Rio de Janeiro, Brazil, for years enjoyed biltong, braais and watching rugby with his South African friend.

Hennig senior even arranged for South African touring groups to travel to Rio de Janeiro to meet Biggs where for $10 he would tell of how he and 14 others conducted the daredevil train robbery during which they stole £2.6 million (about R34 million at today’s exchange).

The heist earned them the “Great Train Robbers” label.

Oloff, who met South Africa’s rugby legend Naas Botha at a boxing match in the US one evening in 1983, is also reputed to have paved the way for Botha’s try-out as goal kicker for the Dallas Cowboys.

Hennig junior would not disclose how long he and Sexwale have had a business relationship but added that the billionaire businessman did not attend his father’s 70th birthday party which was held during the recent rugby match between the Stormers and Bulls at Loftus Versveld Stadium in Pretoria.

It is said that the party, where everything was paid for, left guests speechless with its extravagance.

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