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Wesizwe to probe Ngculu bonanza

Mar 27 2011 09:13
Andile Ntingi

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Last Updated: 09-02-2016 at 04:09. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Wesizwe Platinum [JSE:WEZ] is to probe whether prominent ANC politician James Ngculu should benefit from an empowerment trust intended to prevent the platinum company from losing a significant chunk of its black shareholding after a Chinese consortium takes a 45% interest in it.

Mlibo Mgudlwa, a Wesizwe executive director and board member, said the company would investigate whether Ngculu should benefit from the trust, known as Micawber, after reports that he had sold most of his Wesizwe shares.

“Anyone who has sold shares in Wesizwe after October 30, 2010 will not benefit from the Micawber Trust.

“Through Micawber, we are trying to preserve our black economic empowerment status. The continued sale of shares by our empowerment partners threatens Wesizwe’s mining licence with the department of mineral resources,” Mgudlwa said.

A concerned Wesizwe shareholder, who does not want unqualified beneficiaries to get their hands on the trust’s shares, told City Press that Ngculu’s firm, Inkwali Asset Management, had sold its shares in Wesizwe and therefore was no longer eligible to be a beneficiary of Micawber.

“I don’t understand why he (Ngculu) has been included as a beneficiary because he sold his shares in Wesizwe at the end of October last year. As far as I know, he could be an insignificant shareholder in the company.

“Wesizwe needs to restructure this trust (Micawber),” said a shareholder who declined to be named.
Wesizwe is currently building a mine in North West, near Sun City, in one of the world’s richest platinum belts. The Chinese consortium – made up of Jinchuan and the China Africa Development Fund – will pay R6.6bn for its 45% stake in Wesizwe; a cash injection which will be used to construct the mine.

According to Mgudlwa, Micawber’s beneficiaries were not allowed to sell their shares in Wesizwe until 2014 as the company wanted to ensure that it could meet its 26% black ownership target by 2014. The Department of Mineral Resources is demanding that all mining companies in South Africa meet the 26% target by 2014.

Julian Williams, an Inkwali director and Ngculu’s long-time business associate, denied that the firm, which was given a 2% share (worth R3.7m) in Micawber, had sold its shares in Wesizwe.

He said Inkwali had entered into an equity repurchase agreement (repo) which resulted in the firm selling about 4.2 million of its 5.8?million Wesizwe shares.

As part of the transaction, Inkwali has the option of buying the shares back within the next 12 months.

“The reason for the repo being entered into, as opposed to a normal collateralised loan, was that the terms offered through the repo were more attractive than through a normal collateralised loan. When the repo (interest) is repaid, the Wesizwe share register should reflect Inkwali returning to its previous number of shares,” Williams said.

He said he did not know why Ngculu’s company has been included as Micawber’s beneficiary, but speculated it was included because of Ngculu’s involvement in the formation of Wesizwe. The Chinese investors will cut Wesizwe’s black shareholding to 12%, but the trust – which will pay $26.6m (R183m) for its stake – will boost empowerment interests to 18%.

anc  |  wesizwe platinum  |  bee



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