/ 24 February 2011

A marriage unconsummated

Steel producer ArcelorMittal’s chief executive, Nku Nyembezi-Heita, must have felt like the jilted suitor when she realised her new BEE partners, the Guptas and President Jacob Zuma’s son, Duduzane, are in bed with a competitor, the Steel Authority of India Ltd (Sail).

But if that’s the way she feels she is not showing it. Her spokesperson, Themba Hlengani, declined to comment after consulting her.

ArcelorMittal’s R9-billion BEE deal with the Ayigobi Consortium, announced in August last year, came as a part solution to her major headache, which was that iron miner Kumba had deprived her of cheap iron ore after upstart company Imperial Crown Trading had snaffled up the rights to 21% — previously ArcelorMittal’s — of Kumba’s Sishen mine.

A forced marriage to get back the family silver seemed the solution and so Imperial Crown’s formal owners — and those around them, notably the Guptas and Duduzane Zuma — were cut into Nyembezi-Heita’s BEE deal.

In addition ArcelorMittal would buy all of Imperial Crown — all subject to a due diligence, of course.

But the due diligence proved another headache — the outcry over the elite, presidentially connected BEE deal raised red flags, not least in terms of the United States Foreign Corrupt Practices Act, to which ArcelorMittal is subject.

Which means Nyembezi-Heita’s marriage to the Guptas and Zuma Jnr remains unconsummated, so to speak.

But whichever way one looks at it, the Guptas and Zuma Jnr appear to have committed a serious breach of faith. They did not respond to specific questions.