Cronyism in Gold Fields case
GOLD Fields’ tribulations are multiplying. Its problems centre on the contortions it had to perform to secure a neworder mining licence for its South Deep mine, previously part of the old Western Areas.
The Mail & Guardian made much of this (September 6) when it reported that African National Congress (ANC) chairwoman Baleka Mbete received a R25m allocation of shares in the black economic empowerment (BEE) deal that both Gold Fields CE Nick Holland and former chair Mamphela Ramphele said was subject to prescription by the Department of Mineral Resources.
The BEE deal certainly involved some interesting characters, in the shape of President Jacob Zuma’s former attorney, Jerome Brauns, and former convicts Kenny Kunene (the “sushi king”, jailed for fraud) and Gayton McKenzie ( jailed for bank robbery).
Having retained noted New York law firm Paul, Weiss, Rifkind, Wharton & Garrison, Gold Fields sidelined the report, recommending it “selfreport” the matter to authorities, a form of admitting guilt and requesting leniency. Declining to heed that advice resulted, apparently, in the departure from the board of Roberto Dañino, former Peruvian prime minister (2001-02) and chair of Gold Fields’ ethics committee.
Gold Fields’ primary listing is on the JSE, but it has a secondary listing in New York, which explains the US Securities and Exchange Commission’s interest in its BEE deal.
I’m no lawyer, but a reading of the US Foreign Corrupt Practices Act may provide loopholes. Under pro- hibited foreign trade practices, an exception in paragraph (b) says the prohibition doesn’t apply to payments to secure a routine government action. And an affirmative defence in paragraph (c) includes “the payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official’s, political party’s, party official’s or candidate’s country”.
Holland was “strongly censured” by Gold Fields’ board (Business Day, August 23) for the way the BEE deal was handled, and he surrendered his R8.46m bonus.
This is an unsavoury affair that underlines the cronyism that pervades the ruling party. The ANC drove this legislation. Its close adherents are being rewarded at everyone else’s expense.
THE UK Daily Telegraph reports a 60% increase in the amount of ocean covered with ice over one year. That’s a million square miles. An unbroken ice sheet more than half the size of Europe stretches from the Canadian islands to Russia’s northern shore. The Northwest Passage between the Atlantic and Pacific oceans has been blocked by pack ice all year.
The Telegraph says the United Nations Intergovernmental Panel on Climate Change (IPCC) is holding a crisis meeting. It seems that governments funding the IPCC want 1,500 changes to its Fifth Assessment Report. They say the current draft doesn’t explain the “pause” in global warming.
Ho, hum…
E-mail: david@gleason.co.za Twitter: @TheTorqueColumn