Gold Fields is under investigation in the US by the Securities Exchange Commission (SEC), after reports that it had “bribed” ANC chairwoman Baleka Mbete with a R25 million share allocation to keep her onboard its black economic empowerment (BEE) deal.
The JSE- and New York Stock Exchange-listed company confirmed the investigation yesterday, saying that it was linked to its empowerment transaction involving the mining licence at the South Deep mine.
“Given the early stage of this investigation, it is not possible to estimate reliably what effect the outcome of this investigation, any regulatory findings and any related developments may have on the company,” Gold Fields said in a statement yesterday.
The company made the allocation after Mbete’s representative threatened to sink the BEE deal if she was not given a bigger stake, the Mail & Guardian newspaper reported on Friday.
In a statement yesterday, the ANC demanded a retraction of the story and an apology to Mbete and threatened to take legal action.
“The ANC and the national chairperson reserve their right to seek legal counsel and recourse to address this libellous and defamatory act.”
The R2.1 billion deal, which was organised by convicted criminals Gayton McKenzie and Kenny Kunene in 2010, gave a 9 percent stake to black individuals as part of the government’s empowerment requirement.
Nick Holland, Gold Fields’ chief executive, waived his bonus last month after the company said an independent investigation had found the implementation of the transaction did not meet its own standards.
Asked about the implications of the investigation on Gold Fields, SEC spokesman Kevin Callahan declined to comment other than to say: “It is the SEC’s policy to neither confirm nor deny the existence or non-existence of any investigations.”
It was important to emphasise that these were only allegations, Peter Leon at Webber Wentzel said yesterday. “In my experience, SEC investigations do not necessarily go beyond the preliminary stage, but one is dealing with an extremely diligent securities regulator which takes its regulatory responsibilities seriously.” – With Bloomberg