The state’s newly appointed diamond board boss has shares in a private diamond company that got mining permits from a Department of Minerals and Energy Affairs office he headed.
Louis Selekane was appointed acting head of the state diamond regulator by Minister of Minerals and Energy Affairs Phumzile Mlambo-Ngcuka last month in spite of a Scorpions’ investigation against him.
Selekane this week denied a conflict of interest, saying he has declared his financial interests to the Department of Minerals and Energy Affairs. However, the department said it had no knowledge that Selekane had declared his significant interest in Mazal Mining and Exploration. This fuels speculation that he had sought to be a player and the referee at the same time.
But a spokesperson for Mlambo-Ngcuka this week confirmed that Selekane, who until recently headed the minerals and energy department’s Northern Cape office in Kimberley, was parachuted to the Diamond Board exactly because of the cloud over his head.
Ministry spokesperson Kanyo Gqulu said: ”All I can say at this stage is that Mr Selekane was removed from the Kimberley office because of the investigation into the allegation of impropriety in that office.”
The connection between Selekane and Mazal was uncovered in a joint investigated by the Mail & Guardian and www.polishedprices.com, a diamond information website.
Mazal, listed on the Johannesburg Securities Exchange, controls the Paardeberg East mine 50km west of Kimberley, earlier touted as ”what appears to be the second-largest diamond deposit in South Africa”. Mazal also has other holdings in Namaqualand.
Both holdings are in the Northern Cape, where Selekane’s Department of Minerals and Energy Affairs office issued mining permits and oversaw the industry, including Mazal.
There is no suggestion that Mazal was party to Selekane’s acquisition of the shares. But the mere fact that Selekane has, since 1999, held shares in a company he was supposed to regulate means that Selekane could not have played the impartial role he should have.
Gqulu this week confirmed there were allegations of impropriety against Selekane and other officials who worked in his Kimberley office. Asked why Selekane was appointed to the diamond board while there was a probe against him, Gqulu said Sele-kane could not be suspended only on the basis of allegations against him.
Selekane was moved to the diamond board to allow an unhindered investigation into the Kimberley allegations, Gqulu said, adding that Selekane’s role at the state diamond regulator was a limited one.
Gqulu said Selekane is not handling funds at the diamond board and that board chairperson Abbey Chikane was monitoring him very closely.
Chikane this week said Selekane was seconded to the diamond regulator’s office by Mlambo-Ngcuka’s office and that he had no say in the appointment.
”I am the last person to dictate to the ministry who that person should be … I am the last person to establish the credentials of this person. He [Selekane] is there representing the Department of Minerals and Energy … I do not have a contract with him.”
Asked whether Selekane had declared to the board that he had shares in Mazal, Chikane said: ”Not to the diamond board. This is the first time I hear of it. But I don’t know about the ministry.”
Approached for comment this week, Selekane said the minerals and energy ministry did not tell him the reason why he was deployed to the diamond board. Selekane was appointed acting CEO of the board in the place of Victor Sibiya, who was suspended last month on eight charges relating to his performance and his allegedly ”antagonistic” relationship with businesses in the diamond industry.
Selekane said he was not aware of any allegations against him and he believed that his involvement in Mazal did not constitute any conflict of interest. Asked whether he has declared his interest in the company, he said: ”Yes, of course, I have declared all my financial interests. I have declared it to the department.”
But Department of Minerals and Energy Affairs Deputy Director General Nchaka Moloi said: ”I am not aware of Selekane’s involvement in Mazal. I was not aware that he is a shareholder in Mazal.”
But Selekane maintained his innocence: ”I only have ordinary shares in Mazal. Mazal did not acquire any state mining permits during my tenure.”
He joined the department as Northern Cape head in 1997.
It is believed Mazal obtained its exploration permit for the Paardeberg mine around 1999 — and subsequently a full mining permit — the same year Selekane acquired his Mazal stake. But Selekane said: ”As far as I am concerned Mazal does not have any state-owned mineral rights they are operating on now. They had a prospecting permit in Paarderberg, which they bought from a farmer. There was no conflict of interest on my part.”
He charged that the allegations against him were being orchestrated by people ”who want to destroy my career”.
Selekane’s Kimberley office was raided last month by the Scorpions for allegedly handing out irregular mining permits. Selekane’s own house was also raided by the crime-busting unit.
Gqulu confirmed: ”Following allegations of impropriety the Scorpions, on the instruction of the department’s director general, raided houses of all accused officials in the Kimberley office including Mr Selekane.”
Gqulu said the department has been advised by the Scorpions not to discuss the specific allegations against the accused civil servants. But the M&G understands that Selekane’s involvement in Mazal is a central feature of the probe against him.
According to www.polishedprices.com Mazal’s share registry shows that Selekane has 2 500 shares in Mazal, 2 400 of which were acquired on May 6 1999 and the remaining 100 subsequently.
David Levithan, a director of Mazal, this week confirmed knowledge of the civil servant’s shares in the company. But he said: ”We did not give them to him. He bought them on the open market, to the best of my knowledge.”
He said he believed that Selekane had made no profit on the shares yet — he acquired them at a time when the share price was high and it had subsequently dropped in value. The Paardeberg mine had not lived up to expectations yet. ”[Mazal] has tried to mine, but is battling to get it together.”
Asked whether the company’s exploration and subsequent mining permits in the Northern Cape were obtained during Selekane’s reign, Levithan said he could ”not remember” when the permits were issued.