By Helen Grange and Agiza Hlongwane
Jacob Zuma’s 28-year-old son, Duduzane, has come to the rescue of his besieged father with a surprise announcement this weekend that he is giving away 70 percent of his share in the R9 billion “money for jam” black economic empowerment deal involving steel mining giant ArcelorMittal.
But the gesture was immediately scoffed at by Cosatu secretary general, Zwelinzima Vavi, as a lame attempt by the businessman to “clear a guilty conscience”.
In a move that is sure to fuel the fire around the controversial deal, a defensive young Zuma said he and his chums, the Gupta family from India, would be giving away R1bn of their new-found fortune.
The recipients of their largesse would be widows and orphans of policemen, needy students, rural women and veterans of the ANC’s armed wing Umkhonto we Sizwe.
The move comes a week ahead of the crucial ANC National General Council in Durban where President Zuma could face a showdown from party opponents.
The Zumas came in for a thrashing over the ArcelorMittal deal, especially as it coincided with a crippling public service strike over pay increases for nurses and teachers.
President Zuma was roasted for ruling over a crony state and one of his erstwhile allies, Vavi, described the ArcelorMittal BEE deal as “outrageous”.
Vavi said: “We are heading rapidly in the direction of a full-blown predator state, in which a powerful, corrupt and demagogic elite of political hyenas increasingly controls the state as a vehicle for accumulation”.
The furore prompted ANC Youth League leader Julius Malema to trash BEE, which he said was enriching “the children of those in power and friends of those who are in power”.
“We must never allow that in South Africa, where African leaders and their families are the richest and their own people in their own countries are the poorest,” Malema said.
Yesterday Vavi scoffed at Duduzane Zuma’s announcement.
“Why is he giving the money away? We are not opposed to people making money ethically and morally.
“He is missing the point. The issue here is that the ArcelorMittal/ICT deal stinks. It has all the hallmarks of illegality and it is immoral. Cosatu is exploring stopping that deal legally.”
Vavi said the fact that Zuma and the Guptas were prepared to part with some of their new found wealth was a tacit acknowledgement that something was wrong.
He said he doubted they would give a portion of the money away and questioned how Zuma and the Guptas settled on a figure of 70 percent.
“No amount of wriggling around will help. This is an exercise in futility, aimed at trying to clear a guilty conscience.”
Mining legal expert Peter Leon said the Zuma and Guptas decision was driven by a feeling, or concern about the appropriateness of the deal.
“I’m pleased that people are going to benefit from it… but the fact of the matter is the whole transaction is very murky and shouldn’t have happened in the first place.
“I think the whole transaction represents the worst form of empowerment and crony capitalism.”
In an interview with the Tribune, Duduzane said: “I am very pleased to announce that I have decided to forgo 70 percent of my proposed allocation (in the ArcelorMittal deal) and spread it among other South Africans who are needy and disadvantaged like I once was.
“I am also pleased to announce that the Gupta family has also agreed to join me to forgo 70 percent of their own allocation.”
“In the next few months, I will be setting up a broad-based share scheme for disadvantaged South Africans to distribute shares in Arcelor Mittal.
Zuma said he held 2 percent of the Arcelor BEE scheme. The Gupta family held 1.41 percent.
He said the gross value of their giveaway would be “just over R1bn”.
Yesterday a spokesman for Acelor Mittal said: “Based on the market capitalisation of the company, the combined value of the Zuma/Gupta share before today’s announcement was 1.2bn. Now it is 350 million.”
Zuma said details of how his Mabengela Empowerment Trust would work would be announced once legalities had been finalised.
Zuma said his roots in Nkandla made him mindful of the plight of rural women.
He said there were too many orphans and child-headed households because of the HIV-Aids pandemic and other causes. He wanted to give these children educational opportunities.
Zuma did not say whether he would be giving away any of the money he stood to make in a separate R800m deal that is more controversial than the ArcelorMittlal BEE transaction.
ArcelorMittal is planning to buy Imperial Crown Trading (ICT), a company owned by Duduzane Zuma, Rajesh Gupta, and others. ICT is embroiled in court action against mining company Kumba in a dispute over who owns 21 percent of Sishen Iron Ore Mine, which supplies raw material to ArcelorMittal’s steel mills. These rights used to belong to ArcelorMittal, but were allowed to lapse, apparently because ArcelorMittal could not come up with a convincing BEE partner.
Kumba, which has a BEE partner and mines the remaining 79 percent of Sishen says it put in an application to mine the balance, and that its application was copied by ICT at the 11th hour.
Zuma told the Tribune he planned to pursue more BEE deals. “You will still hear more about me,” he said. - Sunday Independent.