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Cape Town - ICYMI: A roundup of Wednesday's must-read financial and economic news.
#GuptaLeaks: A tale of two captures: Alexkor, Gupta Inc and 'WMC'
The diamond-rich desert area of the Richtersveld, on South Africa's north-west coast, seems unable to escape the clutches of monopolisation.
There's a legendary creature that inhabits the Richtersveld, the land of deserts and diamonds along South Africa's north-west coast.
The Grootslang, a primordial cross between an elephant and a snake, is both wily and deadly and guards a cave filled with gems, dispatching unwary treasure-hunters either with guile or overwhelming power.
The myth might be a metaphor for Alexkor and the “resource curse” that the state-owned diamond company presides over.
In 2007, the Land Claims Court awarded the Richtersvelders land and mining rights expropriated by the state during the colonial era – including the diamond-rich area controlled by Alexkor.
The community acquired rights to mine diamonds on the land while Alexkor retained its rights to diamonds on the seabed. Both onshore and offshore rights were pooled in a joint venture company, owned 51% by Alexkor and 49% by the Richtersveld Mining Company.
Now the Richtersveld seems still beset by the massive dominance, on the one hand, of the Alexkor elephant and, on the other, by a shelf-company whose corporate coils seem to lead back inexorably to the Guptas.
And in the background lurks the presence of a Grootslang that survived: Trans Hex, the company controlled by that old giant of White Monopoly Capital, Christo Wiese (the billionaire currently embroiled in the Steinhoff saga).
READ: #GuptaLeaks: A tale of two captures: Alexkor, Gupta Inc and 'WMC'
The Industrial Development Corp is suing four companies linked to the Gupta family after they failed to repay a loan that the state-owned development financier cancelled because it suspected illegal activity.
The Guptas’ Oakbay Resources and Energy, Oakbay Investments, Action Investments and Shiva Uranium owe the IDC R287.5m in principal and interest, and are also liable for the institution’s legal costs, the development finance institution said in court documents stamped November 30.
The IDC cancelled its original R250m loan agreement, signed more than seven years ago, on November 10 after it said the Gupta companies breached the pact by possibly being involved in fraud.
Zuma 'lost on all fronts' - OUTA
Civil rights body the Organisation Undoing Tax Abuse has welcomed the judgment in the North Gauteng High Court in Pretoria which found that President Jacob Zuma must fulfil the remedial actions of former Public Protector Thuli Madonsela’s 2016 State of Capture report.
The court found the President must institute a commission of inquiry into state capture within 30 days of the ruling. The inquiry is to be headed by a judge appointed by Chief Justice Mogoeng Mogoeng.
OUTA said on Wednesday after the judgment that it appears the judiciary has, at long last, called a halt to the president “using public funds to fight his personal battles”.
READ: Zuma 'lost on all fronts' - OUTA
Inflation eases to 4.6%
November inflation has eased to 4.6%, according to data from Statistics South Africa.
This rate is 0.2 of a percentage point lower than the corresponding annual rate of 4.8% in October. The consumer price index increased by 0.1% month-on-month (m/m) in November 2017.
On average prices increased 0.1% from October.
- READ: Inflation eases to 4.6%
Ramaphosa ANC contest win may see stocks slump
In the topsy-turvy world of South African stocks, a triumph for investors’ preferred candidate in the contest to lead the ruling African National Congress could weaken the JSE's benchmark Top 40 index.
Success for the Ramaphosa campaign in the December 16-20 elective conference in Johannesburg may prompt investors to price in a higher probability of structural reforms, boosting confidence in the economy and causing the currency to appreciate.
And that’s not necessarily good news for benchmark index heavyweights with significant foreign operations and those with listings in developed markets that benefit from rand weakness.
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