[miningmx.com] — LAZARUS Zim and the controversial Gupta family have
cut business ties.
The well-respected businessman confirmed last week he severed all business ties
with the Gupta family last year, ending a relationship plagued by controversy ever
since a company with close links to the Guptas won lucrative iron ore mineral rights.
Zim downplayed the separation, saying the move was made in the interest of using
his time better.
“I am out of The New Age and other [Gupta] businesses. I have limited time
and it’s a question of reprioritising my efforts to focus on key projects. I will
announce these in due course. The separation happened last year,’ Zim told City
Press last week.
Zim is the second high-profile South African to go on record about cutting business
ties with the wealthy Gupta family, which comprises Ajay and younger brothers Atul
and Rajesh.
Essop Pahad, a former Minister in the Presidency under Thabo Mbeki and a one-time
ANC bigwig, broke all business ties with the Guptas last year after they stopped
funding his political magazine, The Thinker.
Both Pahad and Zim were in 2010 appointed as directors of TNA Media, the publisher
of the The New Age newspaper, which said at its launch that it would be
“broadly sympathetic to the government’.
Zim was also a shareholder in the New Age and Sahara Computers, another Gupta-
owned company.
Another prominent businessman, who declined to be named, also confirmed to
City Press that he had cut ties with the Guptas, but refused to say why.
The relationship between Zim and Guptas extended beyond The New Age and
Sahara Computers. The Guptas, through a family investment vehicle called Oakbay
Investments, owned 30% of Zim’s Afripalm Holdings. If the relationship was over, this
implied that the Guptas were bought out of Afripalm.
Gupta family spokesperson Gary Naidoo said Zim left purely for business reasons.
“I have read your questions and they seem to be another fishing expedition.
“All businesses reshape their investments from time to time. Lazarus Zim remains a
friend of the [Gupta] family,’ he said.
Zim is highly regarded in business circles. He is a former Anglo American SA chief
executive. In 2000 he was appointed chief executive of M-Net and a year later was
made Managing Director of MTN international. He relinquished the position in 2003.
Zim had to field some tough questions about his proximity to the Guptas ever since
little-known shell company Imperial Crown Trading (ICT) snatched a 21.4% mining
right in Sishen iron ore mine from under the nose of Kumba Iron Ore, which owns the
mine. Kumba is a subsidiary of mining giant Anglo American.
At the time of the awarding of the mining right by the Department of Mineral
Resources, Zim was the chairperson of Kumba Iron Ore, which also applied for the
mining right in 2009 but lost it to ICT.
Because of his association with some shareholders of ICT, Zim was seen as being
conflicted.
In 2010, he hogged headlines in the furore over the awarding of the mining right to
ICT.
An article in the Mail & Guardian accused him of a potential conflict of interest
because of his business dealings with the Guptas.
Jagdish Parekh, an executive of Gupta companies, held half of ICT – the firm that
was awarded the 21.4% stake in Sishen iron ore mine.
Zim resigned from the Kumba board in December 2010 even though the board came
to his defence and said it saw no conflict of interest.
Recently Zim, who is a chairperson of Telkom, came under fire after Telkom
sponsored presidential breakfast briefings hosted by The New Age newspaper.
Zim was the director of the newspaper at the time.
The Gupta family rose to prominence because of its close relationship with President
Jacob Zuma and even involved Zuma’s children, Duduzane and Duduzile, in its
business deals.
The Guptas, Duduzane and ICT were part of the Ayigobi consortium that tried to
acquire 26% in steel producer ArcelorMittal SA for R9bn.
ArcelorMittal, which used to own the rights that fell into the hands of ICT, roped ICT
into the consortium to wrestle back the iron ore mining right.
Following intense public criticism and a determined legal objection from Kumba, the
deal was cancelled by ArcelorMittal, leaving the consortium, dominated by people
close to Zuma, empty-handed.
– City Press
