[miningmx.com] — BROTHERS Ajay and Atul Gupta said the Ayigobi black empowerment deal with ArcelorMittal SA (Amsa) – of which they were beneficiaries -would probably not go ahead, according to City Press.
In a wide-ranging interview with the newspaper the annoyed brothers – flanked by their business partners, Jagdish Parekh and Duduzane Zuma – said they were losing millions of rands due to the “constant negative publicity” surrounding their friendship with President Jacob Zuma and his family.
Ajay Gupta said the empowerment deal with Amsa is yet to be approved by the company’s shareholders. “No money has been made yet. I believe personally that this deal is not happening.”
He pinned this statement on the fact that the Ayigobi transaction had not been presented to Amsa’s shareholders. “If it was happening, it would have already been taken to the shareholders,” he said.
Asked about a potential conflict with him advising on and benefiting from the transaction, Ajay replied by saying it was unfair to call him a “transaction adviser”.
“He (ArcelorMittal chairperson Lakshmi Mittal) asks me, when he does these BEE deals, as a friend, it’s nothing official to do with ArcelorMittal South Africa. I’ve never even met the company’s CEO or anyone in the company.”
Ajay said he knew Lakshmi Mittal “very well” and Mittal told him “many times” that he wanted to do a deal.
While Mittal was “finalising” the deal, he asked Ajay again for a “new entrant”, to which he replied: “This is the group, why don’t you take it to them? I recommended Dudu (Duduzane Zuma) also.”
In exchange for the $50m funding he (Ajay) provided, he asked for a stake in the consortium.
Of the 26% BEE stake in ArcelorMittal, 10.5% would go to Imperial Crown Trading (Parekh’s company, which he declined to discuss during the interview); 5% to Amsa’s employees; 5.25% to another BEE grouping that pulled out; and the majority of the remaining 5.25% to be split between the Guptas, Duduzane Zuma and businessman Sandile Zungu.
The deal has a total value of $150m (about R1bn). After five years, Zuma Jnr’s company would get $2.5m (about R18m) and the Guptas $1.5m (about R11m).
LAZARUS ZIM
On their relationship with businessman Lazarus Zim, Ajay said Zim was looking for an investor and the family’s Oakbay Investments bought 30% of Zim’s Afripalm Holdings.
“This has nothing to do with empowerment. I went in as an investor and until today, I did not get a single cent in dividends from that company,” he said.
Click here for the full interview on these and other issues with City Press.
