The rise (and fall?) of Duduzane Zuma

Duduzane Zuma. Picture: Brendan Croft
Duduzane Zuma. Picture: Brendan Croft

Although Duduzane Zuma wants people to believe he is like any normal South African, other citizens are not handed hundreds of millions of rands in shares, apparently either for free or at a massive discount.

City Press’ analysis of the share registers and director reports of eight companies in the Gupta empire reveals that shortly after his father became ANC president in 2007, the younger Zuma received top jobs and lucrative gifts of shares in Gupta companies.

Duduzane (33) said on Friday: “My history and background is no different from that of all previously disadvantaged black people. The economy is necessarily skewed against us.

“Notwithstanding my efforts to participate meaningfully in the economy, aspersions were cast on me and my family.”

Duduzane resigned as a director of Shiva Uranium on Friday and said that he would “exit” his investments in the Oakbay Group, a collection of listed and private companies majority-controlled by the Guptas.

‘I have decided to relinquish all positions that I hold at Oakbay companies and am exiting investments to preserve the jobs of Oakbay’s thousands of employees and to depoliticise my participation in business,” he said.

The Gupta and Zuma families have always maintained that there was nothing unusual about Duduzane’s rise in the Gupta empire, starting as a young trainee in the 2000s and progressing to major shareholder and senior executive.

Last month, President Jacob Zuma reportedly told an ANC alliance summit in East London that the Guptas had come to his son’s rescue after he struggled to find a job as an intern in the IT sector.

However, the director reports and share registers suggest that it was not until President Zuma won the ANC’s 2007 Polokwane conference that his son’s star really began to rise.

In July 2008, Duduzane was given shares and appointed as a director of Mabengela Investments alongside the younger Gupta brother, Rajesh. Over the next two years and four months, Duduzane was appointed as a director in another 11 Gupta companies.

Importantly, Duduzane also began to acquire significant shareholding in a number of Gupta companies through two primary investment vehicles, Mabengela Investments and Islandsite Investments 255. These include significant stakes in:

. Shiva Uranium, a gold and uranium mine in North West;

. Tegeta Exploration and Resources, which recently sold a R2.2 billion coal mine with a lucrative Eskom contract to Oakbay, which is in the process of buying Glencore’s Optimum coal assets;

. Infinity Media Networks, which owns the Gupta TV channel ANN7; and

. JIC Mining, which provides mine support services and owns a stake in steel manufacturer VR Laser.

Share registers show that Duduzane paid just R25 for his initial 25% stake in Mabengela Investments.

A month after his father became president of the country in 2009, Duduzane was given an additional 20% stake in Mabengela.

In total, he appears to have paid just R45 for his lucrative 45% stake in the company.

The notable exception appears to be Mabengela’s recent acquisition of a stake in Tegeta Exploration and Resources, concluded just three weeks before Tegeta announced that they had signed a deal to buy Glencore’s Optimum coal assets for R2.15 billion in a deal that was dogged by allegations of political interference.

Although it has been widely reported that Mabengela was “gifted” its 28.5% stake in Tegeta, a pencil entry in Tegeta’s share register indicates that Mabengela paid R100 million for its shares.

However, it is unclear whether Duduzane, as a 45% shareholder, was required to put up some of the cash.

While this may seem generous, the stake Mabengela bought for R100 million is conservatively estimated in a circular to shareholders to be valued at R627 million.

The same share register also shows that, on February 26 2016, just three days after the Competition Tribunal approved Tegeta’s takeover of Optimum Coal, Mabengela was given an additional 71 shares in Tegeta – this time for free.

Although Mabengela’s shareholding remained at 28.5% – because of the allotment of new shares to other shareholders – the shares “gifted” to Mabengela were worth nearly R96 million.

Duduzane has not given any indication of whether he intends to resign from or sell his shares in Mabengela Investments or Islandsite Investments 255.

Although this is where the real value of his shareholding lies, both these companies technically fall outside of the Oakbay Group.

City Press repeatedly asked Oakbay Investments for clarity on this issue, but all requests went unanswered.

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