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Johannesburg – Kumba Iron Ore [JSE:KIO] announced on Friday its chairperson Lazarus Zim has recused himself with immediate effect from participating as a board member in any proceedings relating to the residual Sishen Mine Mineral Rights.
"The chairman considers that, as a matter of principle, and for the avoidance of doubt as to the integrity of the processes that are currently underway, it is in the best interests of the company and its shareholders that he recuse himself from these processes with immediate effect," Kumba said.
Zim will however continue to serve as chairperson of the board and to lead all other board matters, Kumba said.
Zim is linked to the empowerment group that snatched the 21.4% right in Sishen iron ore mine from under Kumba's nose.
Zim is a director and shareholder of Sahara Computers, which is owned by the Gupta brothers, who are reportedly very close to President Jacob Zuma, the Mail & Guardian recently reported.
The Gupta’s Oakbay Trust is a sizeable shareholder in Zim’s Afripalm Resources, which controls Mvelaphanda Resources [JSE:MVL].
Jagdish Parekh, who is an executive of Gupta companies, heads a firm called JIC Mining, which holds half of Imperial Crown Trading 289 (ICT), the firm that was awarded the 21.4% stake in Sishen iron ore mine.
“It is through Parekh and the Gupta’s that Zim’s ‘potential conflict’ arises,” reported the Mail & Guardian.
The awarding of the stake in Sishen is mired in controversy. ArcelorMittal SA [JSE:ACL] held the 21.4% right but did not renew it by end-April 2009 as required by mining laws. These rights reverted back to the state.
Just four days later, Kumba, which owns the rest of Sishen in a venture with Exxaro Resources [JSE:EXX], submitted a mining right application over the 21.4% stake. On the very same day, ICT put in a prospecting right application. According to legislation, ICT was favoured because preference must be given to “historically disadvantaged persons”.
Very little is known about ICT, but it has listed as its executives some politically connected individuals.
The documents of both applications are said to bear remarkable similarities, prompting questions about why that would be the case, with suggestions ranging from a leak within the DMR’s regional office handling the applications to leaks within Kumba or the firms appointed to handle the process.
Kumba has previously stood by Zim.
“The executive and non-executive directors of Kumba have agreed that there is no conflict of interest as Mr Zim is not involved in any way in ICT, and that Lazarus Zim has significant experience and wisdom to add to the deliberations,” said a Kumba spokesperson recently.
“Because of his association with shareholders of ICT, Zim has, on three occasions, offered to recuse himself from discussions in the Kumba board meetings about ICT. The Kumba board did not believe that this was necessary."
- Miningmx.com
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