Amsa puts ICT vote on hold

2010-09-26 16:08

Johannesburg - ArcelorMittal SA [JSE:ACL] shareholders will no longer vote this week on a controversial R9.1bn broad-based black economic empowerment deal, because a due diligence on Imperial Crown Trading 287 is still under way, reported Business Times.

ICT is accused of forging part of its application for the prospecting licence it holds on Kumba's Sishen iron ore mine.

ArcelorMittal's BEE shareholder, the Ayigobi consortium, consists mainly of ICT shareholders, with 50%-ICT shareholder Jagdish Parekh, who works for the well-connected Gupta family, as the main beneficiary. Ayigobi members include Duduzane Zuma, son of President Jacob Zuma, and the Guptas, who are closely linked to the Zumas. They own Sahara computers and have various other mining interests.

A number of damning allegations against ICT have been made by Kumba-owned Sishen Iron Ore Company (SIOC), which is taking the Department of Mineral Resources, the minister and ICT to court over the department's granting of a 21.4% prospecting licence over the Sishen mine. ArcelorMittal originally owned the 21.4% mining right, but failed to apply for its conversion in 2009, when old-order rights lapsed.

Vanessa Lickfold, Kumba's head of geosciences, said in her affidavit that ICT's application was "so inadequate, incomplete, internally inconsistent and in parts nonsensical that it is simply not consistent with an authentic desire by ICT to engage in genuine prospecting operations".

Lickfold was particularly critical of work programmes allegedly submitted by ICT contractors, geologist Ezra Nkosi and drilling company Touchstone Drilling & Exploration. It has since been reported that the documents from these parties, which formed an important part of ICT's application, have allegedly been forged, possibly from previous applications done for diamond prospecting in the Kimberley area.

ArcelorMittal, which announced in August that it would buy ICT for R800m, said in response to queries about the postponement of the general meeting that "a comprehensive and thorough due diligence process is under way. Given the importance of this issue, it is important that the due diligence process is given the appropriate length of time to garner a full understanding and analysis of events. ArcelorMittal South Africa has, of course, read the various media articles, but due diligence cannot be completed solely based on media reports."

No money has been paid to ICT to date, an ArcelorMittal spokesperson said.