Hitachi has agreed to buy the stake in Hitachi Power Africa held by an ANC investment arm after criticism that the shareholding constituted a conflict of interest as the unit has won business from state companies.
Hitachi Power Europe would buy the 25 percent stake from Chancellor House Holdings for an undisclosed amount, the South African unit of the Tokyo-based company said last week.
It would also buy the 5 percent held in the unit by Makotulo Investments & Services to become the sole shareholder.
“All parties have agreed strict confidentiality about the terms and conditions of the contract,” Hitachi Power Africa said.
Hitachi Power Africa won R38.5 billion of contracts from Eskom to install boilers at the Medupi and Kusile power plant projects. In 2010, executives of Hitachi’s South African unit said the Chancellor House stake was a conflict of interest and ideally should be sold, following criticism from opposition parties and labor unions.
Mathews Phosa, the ANC treasurer-general at the time, ordered Chancellor House to sell the stake within six weeks. That order was not effected.
ANC spokesman Jackson Mthembu declined to comment on Friday, referring queries to Chancellor House, which also declined to comment.
Delays and errors by contractors including Hitachi have held up the start-up of the R105bn Medupi plant, Africa’s biggest power facility, by at least two years, stifling economic growth in the electricity-constrained economy.
Chancellor House stood to make R50 million in profit over eight years from its interest in the Hitachi unit, Hitachi said in 2010, though this money was “ring-fenced” for redistribution to black people. – Bloomberg