Glencore shares dip on Brian Molefe’s state capture allegations
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JOHANNESBURG - GLENCORE dipped slightly on Friday after former Eskom chief executive Brian Molefe linked the miner to state capture.
Glencore weakened 0.44 percent to R58.24 as Molefe opened a can of worms on Friday, accusing it of using President Cyril Ramaphosa's political influence to score lucrative contracts at the power utility.
Molefe said Glencore embarked on a politically motivated move to partner with Ramaphosa, who was then ANC's deputy president, and appointed him chairperson of its subsidiary, Optimum.
“They sold 9.64 percent to Ramaphosa, a political heavyweight, and made him chairperson of the new company,” Molefe said.
“They knew the profitability of the company could only come from the successful renegotiation of the price. Ramaphosa was their bet.”
Ramaphosa was Glencore's BEE partner when the diversified natural resource company acquired Optimum Coal Mine (OCM) in 2012.
Glencore later sold OCM to the Gupta family's Tegeta Resources when the mine was placed under business rescue after it was fined R2.1 billion penalties by Eskom for allegedly supplying poor-quality coal to the utility.
Molefe was summoned by the Judge Raymond Zondo's Commission on State Capture to testify about his tenure at Eskom and Transnet after a number of witnesses and former Public Protector's report implicated him in dodgy contracts won by the Gupta family.
He said that Glencore had demanded that Eskom increase the price of coal per ton from R150 to
R530, which would have meant a transfer of R6bn from Eskom to the company over three years.
Molefe said Ramaphosa must have known about what Glencore sought to achieve as he was chairperson when the penalties were imposed and when Glencore sought to increase the price of coal.
But Glencore refuted Molefe's allegations, saying that Ramaphosa had exited their partnership prior to becoming the country's Number 2.
“Ramaphosa, who was Glencore's long-standing BEE partner, partnered with Glencore in 2011 and 2012 in acquiring an interest in Optimum,” the company said in a statement. “Ramaphosa exited his stake in Optimum in May 2014 prior to his appointment as deputy president.”
Molefe alleged that Ramaphosa might have exposed himself to conflict of interest as chairperson of the
Eskom war room since he had chaired a company that did business with a State-owned enterprise.
He said chairing the Eskom war room meant that Ramaphosa was a de facto Eskom board chairperson in the Office of the President.
“The deputy president of the country was the chairperson of the war room. He was a de facto chairperson and had started playing this role directly from being the chairperson of Optimum,” Molefe said.
“When the deal was done in 2012 he was sold shares or he bought shares, he was made chairperson. In 2014, he became deputy president, chairperson of the war room.
“One would have expected that under corporate governance, there must be a cooling off period, precisely for things like this.”
Ramaphosa was brief and direct in his response on Friday, saying that he would step down from his position should he get charged with corruption.
“There is a lot of untruth in saying that I got shares, because I wanted to advance the interests of Glencore. It's far from the truth,” he said.
“People will throw stories around to try to tarnish people. I will respond to the real facts and deal with them. I will be having my own opportunity to go before the Zondo Commission and testify.”