Wesizwe to probe Ngculu bonanza

2011-03-26 09:02

Wesizwe Platinum is to probe whether prominent ANC politician James Ngculu should benefit from an empowerment trust ­intended to prevent the platinum company from losing a ­significant chunk of its black shareholding after a Chinese consortium takes a 45% interest in it.

Mlibo Mgudlwa, a Wesizwe executive director and board member, said the company would investigate whether Ngculu should benefit from the trust, known as Micawber, after reports that he had sold most of his Wesizwe shares.

“Anyone who has sold shares in Wesizwe after October 30, 2010 will not benefit from the Micawber Trust.

“Through Micawber, we are trying to preserve our black economic empowerment status. The continued sale of shares by our empowerment partners threatens Wesizwe’s mining licence with the Department of Mineral Resources,” Mgudlwa said.

A concerned Wesizwe shareholder, who does not want unqualified beneficiaries to get their hands on the trust’s shares, told City Press that Ngculu’s firm, Inkwali Asset Management, had sold its shares in Wesizwe and therefore was no longer eligible to be a beneficiary of Micawber.

“I don’t understand why he (Ngculu) has been included as a beneficiary because he sold his shares in Wesizwe at the end of October last year. As far as I know, he could be an insignificant shareholder in the company.

“Wesizwe needs to restructure this trust (Micawber),” said a shareholder who declined to be named.

Wesizwe is currently building a mine in North West, near Sun City, in one of the world’s richest platinum belts.

The Chinese consortium – made up of Jinchuan and the China Africa Development Fund – will pay R6.6-billion for its 45% stake in Wesizwe; a cash injection which will be used to construct the mine.

According to Mgudlwa, Micawber’s beneficiaries were not allowed to sell their shares in Wesizwe until 2014 as the company wanted to ensure that it could meet its 26% black ownership target by 2014.

The Department of Mineral Resources is demanding that all mining companies in South Africa meet the 26% target by 2014.

Julian Williams, an Inkwali director and Ngculu’s long-time business associate, denied that the firm, which was given a 2% share (worth R3.7-million) in Micawber, had sold its shares in Wesizwe.

He said Inkwali had entered into an equity repurchase agreement (repo) which resulted in the firm selling about 4.2 million of its 5.8?million Wesizwe shares.

As part of the transaction, Inkwali has the option of buying the shares back within the next 12 months.

“The reason for the repo being entered into, as opposed to a normal collateralised loan, was that the terms offered through the repo were more attractive than through a normal collateralised loan.

When the repo (interest) is repaid, the Wesizwe share register should reflect Inkwali returning to its previous number of shares,” Williams said.

He said he did not know why Ngculu’s company has been included as Micawber’s beneficiary, but speculated it was included because of Ngculu’s involvement in the formation of Wesizwe.

The Chinese investors will cut Wesizwe’s black shareholding to 12%, but the trust – which will pay $26.6 million (R183-million) for its stake – will boost empowerment interests to 18%.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.