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Exclusive: Are the Guptas about to pull off a scam - and score ...


Exclusive: Are the Guptas about to pull off a scam - and score R2bn a year?

Threatening letter to business rescue practitioners tries to fend off buyers of Gupta mines


An elaborate plan to buy the Tegeta-owned Optimum and Koornfontein coal mines might see the Gupta family regain control of the lucrative assets it had to forfeit to a business rescue process – and score R2-billion a year in profits.
The two mines, that supply coal to Eskom, have been placed under business rescue after landing in financial difficulty when the Bank of Baroda withdrew its services, causing a standstill of the Guptas’ mining operations.
But now a company, whose key figure has been closely linked to the Gupta family, has stalled efforts by business rescue practitioners to sell the mines, threatening legal action.
“It has come to my attention, from many people … that this guy is a front [for the Gupta family],” a mining industry insider told Times Select.
“We have to find out who is behind this thing [Charles King SA].”
Charles King SA already started a process to buy the two mines in August last year. But the process hit a hiccup when eight Gupta businesses, including Optimum and Koornfontein, were placed under voluntary business rescue in February.On March 15 the director of Swiss shelf company Charles King SA, Amin al Zarooni, wrote to Louis Klopper and Kurt Knoop, the business rescue practitioners appointed to oversee the rescue process at eight Gupta companies. Zarooni demanded they cease and desist with “illegal negotiations” with other potential buyers – and threatened legal action if the negotiations continue.
But, according to information contained in the leaked Gupta e-mails, Al Zarooni has an existing business relationship with the Gupta family.
He was part of a group of UAE businessmen who went on a hunting trip with the Gupta brothers in 2015. According to his visa application, he was there “to explore investment opportunities in the mining sector”, at the invitation of Sahara Computers.Al Zarooni also previously assisted in setting up companies for the Gupta families in Dubai, the e-mails show. He is the only shareholder of SKG Holdings, a special-purpose vehicle reportedly set up to channel foreign funds to other Gupta-owned Dubai companies.
The sole director of SKG is Soo Young Jeon, a Chinese national who previously worked for the Gupta family in South Africa.  She is among the Gupta associates connected to the corrupt Estina Dairy Farm project.
Klopper and Knoop were appointed in February after the Gupta companies filed for business rescue with the Companies and Intellectual Properties Commission.
Times Select understands that several expressions of interest and non-disclosure agreements have been signed with at least two bidders, one a leading multinational and the other a well-known local mining company.
But Charles King SA, in the letter to the business rescue practitioners, claimed these negotiations with the two other bidders were illegal, because of the August deal to buy the mines.
The letter sets out that Charles King SA is in the process of finalising preparations to meet the suspensive conditions as outlined in the sale agreement between it and Tegeta Exploration, which owns the Optimum and Koornfontein mines.
“Should you fail to cease and desist from engaging in the illegal negotiations with immediate effect, we shall have no alternative but to invoke our protections in the SSA and the protections afforded to us by law,” the letter adds.
Klopper did not respond to e-mailed questions over the status of purchase offers for the mines and his plan to deal with the threats from Charles King SA.
An attachment to the letter is a signed share sale agreement between Charles King SA and the Gupta-owned Tegeta dated August 2017 for the Optimum and Koornfontein mines, for the amount of R2.9-billion.
The Gupta family bought Optimum and Koornfontein from Glencore in early 2016 for a little over R2-billion.The agreement shows that Charles King needed to pay R66-million as part of an “initial payment”, which the company says has already been made.
Times Select understands that this letter has now been circulated to all potential buyers to inform them of the stumbling block that could potentially hinder a sale to any party other than Charles King SA.
Klopper told Times Select on Thursday the business rescue practitioners had no comment at this stage.
“The matter is highly sensitive and is currently being dealt with by the legal team, to advise the practitioners of its validity,” he added.
In December this year, when Optimum’s loss-making  contract with Eskom comes to an end, Optimum, through its eight million tons a year export allocation at Richards Bay Coal Terminal, stands to make a profit of close to R2-billion a year – which, sources say, is the strongest motivation for the Gupta family to hold onto the mine. Once the contract with Eskom ends, the coal can be sold to overseas clients.
Currently, Optimum provides 600,000 tons a year to Eskom’s Hendrina power station, at R200 a ton.
The mine can sell the same coal through export agreements at closer to R600 a ton if current commodity prices hold true, the source said, adding that there were questions over Charles King SA.
“We just don’t know enough about this Al Zarooni guy. The rumours are that he is operating as a front for the Gupta family,” the source said.
If Charles King SA is indeed a front for the Guptas, the family could be “buying” its own mine with the intent of circumventing restrictions on banking facilities imposed on the family by South African banks in 2016.
Questions sent to Charles King SA, Optimum director Ugeshni Govender and Oakbay director Ronica Ragavan regarding the nature of Al Zarooni’s relationship with the Gupta family and how the shelf company planned to fund the purchase of the mines, went unanswered.
There is currently an application before the Pretoria High Court to have to the two business rescue practitioners removed, but the court is yet to make a ruling on this.

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