‘Zuma’s son a top shareholder’

Duduzane Zuma is reportedly the biggest individual shareholder in a group that’s acquiring Glencore’s Optimum colliery.

Johannesburg - South African President Jacob Zuma’s son Duduzane is the biggest individual shareholder in a group that’s acquiring Glencore’s Optimum colliery, a person familiar with the shareholding said. The group includes the Gupta family, whose links with the Zuma family have been criticised by opposition parties.

Tegeta Exploration & Resources agreed to buy Optimum for R2.15 billion in December after Glencore had placed the mine under administration because it said it couldn’t make a profit due to the terms of a coal supply deal with state power company Eskom. Tegeta is 64 percent owned by Mabengela Investments, which in turn is 45 percent owned by Duduzane Zuma, the person said. That makes him the biggest individual shareholder in Optimum, the person said.

Oakbay Investments spokeswoman Yolanda Zondo said she couldn’t immediately comment when called by Bloomberg and requested emailed questions to which she is yet to respond. Oakbay represents both Duduzane Zuma and the Gupta family, whose businesses have employed one of Jacob Zuma’s wives. Representatives of the family sit on at least 12 company boards with Duduzane Zuma, public filings show.

Tegeta agreed to buy Optimum in December, days after South African Mines Minister Mosebenzi Zwane flew to Switzerland and met Glencore Chief Executive Officer Ivan Glasenberg, with whom he discussed the deal. Zwane said in a February 8 interview that he encouraged the acquisition in the hope of saving jobs.

Zwane’s political adviser, Malcolm Mabaso, 33, and Salim Essa, a business partner of the Guptas, are both directors of a company called Premium Security and Cleaning Services, publicly available company filings show.

The Guptas’ alleged influence in shaping policy in the Zuma administration has drawn criticism from the opposition and expressions of concern from within the ruling African National Congress and its labor union allies. The family, led by brothers Atul, Ajay and Rajesh, came to South Africa from India in 1993 and built a business group ranging from computers to uranium mining.

“There’s absolutely no doubt that here you have a situation of patronage that gives advantage to those who are politically connected,” Somadoda Fikeni, a political analyst and professor at the University of South Africa in Pretoria, said Thursday in a phone interview. “Even ANC leaders are starting to raise this issue.”

Slowing growth

With flagging economic growth and the threat of a credit rating downgrade, Zuma is also under pressure from business leaders to show South Africa is an attractive investment destination. Confidence in the economy took another hit in December when he appointed a little-known lawmaker as finance minister to replace the respected Nhlanhla Nene. He changed the decision within four days, and appointed appointed former finance minister Pravin Gordhan, after it triggered a plunge in the rand and government bonds.

The Competition Tribunal, South Africa’s antitrust body, started hearings on February 17 into Tegeta’s purchase of Optimum. The Competition Commission has recommended the tribunal approve the transaction, subject to a ban on job cuts.

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