President Cyril Rampahosa’s son, Andile, has hired a law firm to review all his future and past business ventures to mitigate against a repeat of the Bosasa scandal that is dogging him and, by extension, the president.
In a statement issued on Monday, Ramaphosa Jr said he had "taken to heart the impact of his relationship with African Global Operations (AGO), formerly trading as Bosasa, on the integrity of his business, his credibility as a businessman and his trustworthiness as a responsible citizen".
He announced that a process to review all his business relationships was now underway.
"I have appointed a legal firm to assist with the review process which will carry out due diligence investigations on all my previous and current business partnerships and to devise a risk management framework going forward to identify and eliminate unethical and potentially questionable relationships."
The statement comes days before News24 was to publish revelations about another murky business partner with whom Ramaphosa Jr was involved - Chinese businessman Jianbao Chen, the chairperson of Huarong Energy Africa.
His statement was emailed to News24 reporters on Monday by public relations manager Vincent Magwenya shortly after 13:00.
"We are very sorry that it could potentially undermine your exclusive story for tomorrow, that is absolutely not the intention," Magwenya’s email reads.
"Andile [Ramaphosa] wants to be proactive and continue being transparent in communicating measures to fix his business and some of the issues he has encountered. The Chen issue is obviously one of them," he added.
During an exclusive interview last Monday with News24, during which Ramaphosa Jr was pressed on his business with Bosasa, he admitted to details unearthed by journalists over months of investigation, including that Bosasa had paid his company Blue Crane Capital R2m since February 2018.
The payments of R150 000 and later R230 000 were made monthly in exchange for Ramaphosa Jr bringing 20 projects to the table, which Bosasa would then undertake the work on. The projects were to be undertaken in Uganda and Kenya.
News24 also raised the issue of Blue Tree International, a company Ramaphosa Jr and Chen are co-directors of.
The R400m Eskom 'kickback'
Chen’s company, Huarong Africa, also featured during testimony at the Zondo commission of inquiry into state capture earlier this month.
In January 2018, Business Day revealed that Eskom’s former acting CEO Sean Maritz had signed a "fee letter" with Huarong, committing that Eskom would pay R400m into a Hong Kong account belonging to Ideva International Group, registered in the British Virgin Islands.
Huarong’s fee was calculated as 1.6% commission for a $2bn (R25bn) loan that was to be sourced by the company through its "parent company" in Beijing, China Huarong Asset Management (CHAM), the newspaper reported.
Huarong’s chairperson was Jianbao Chen. Chen was also a signatory on the fee letter and the sole owner of Ideva international.
Eskom officials raised red flags, as they could not find any link between Ideva and the company which was providing Eskom with the loan, CHAM.
Disgraced former Eskom chief financial officer Anoj Singh in 2017 had signed the loan agreement against legal advice from London-based White & Case, which said it could not establish links between Chen’s company’s Huarong and Ideva and CHAM, with whom Eskom had the legitimate loan agreement.
Essentially, Eskom insiders said at the time that the payment was a disguised kickback and refused to follow through.
Blue Tree International
Ramaphosa admitted in his statement on Monday that he had a business relationship with Chen, which started around the same time that Business Day published its first expose over the deal.
News24 confronted Ramaphosa Jr with company records last Monday showing that he and Chen were co-directors of a company registered in January 2018, named Blue Tree International, and pointed out Chen’s alleged involvement in the apparent attempt to score a R400m kickback from Eskom.
"[Blue Tree] was formed with the express purpose of acquiring a majority shareholding stake in Mercantile Bank, which was up for sale at the time. If their bid for Mercantile Bank were to be successful, the partnership would have resulted in Ramaphosa owning 13% of the bank, with Chen owning the majority 87%," Ramaphosa Jr’s statement issued on Monday reads.
"Furthermore, the pre-bid screening by Deutsche Bank who were the mandated advisors to Mercantile Bank did not raise any suspicious detail about Chen and his Huarong Energy Africa business, nor did law firm Edward Nathan Sonnenbergs, which was engaged to act on our behalf in the bid process pick up any concerns", adds Ramaphosa.
After "careful consideration", Ramaphosa Jr pulled out of the bid to acquire Mercantile in May 2018, leading to "the collapse of the relationship between Ramaphosa and Chen".
"I accept the responsibility that I have as a son of the President and the higher level of scrutiny that my company, Blue Crane Capital, needs to experience. This process presents an opportunity to create a template of how to do business as a son of the President," the statement reads.
"We want to leave a legacy of uprightness and ethical business practices. That is why we have hired a legal team to assist us in this effort to develop a template of how to do risk management. We must set a precedent," Ramaphosa Jr said.
"This is important for me because like every South African I want to see corruption end. People accused or being investigated for corruption must face the law when found guilty. We want to see law and order prevail," he said.
Company records show that Ramaphosa Jr was still listed as a director of Blue Tree on Monday, together with Jianbao Chen and another Chinese national.
*News24 is attempting to obtain comment from Mr Jianbao Chen and will update this story once a response has been received.