BRETT Kebble’s one-time protégé has learnt some nifty steps from the master, but that has not stopped him from treading on his former teacher’s toes.
w Mzilikazi Godfrey Khumalo is proposing to take to the floor of the JSE Securities Exchange (JSE), a contentious billion-rand flotation of essentially Zimbabwean gold mines. Kebble’s friend and financial columnist David Gleason recently declared open season on Khumalo.
If there were any doubts about the supposed Durban-based billionaire businessman’s two-timing antics, one needs to take a closer look at Khumalo’s long-promised, endlessly postponed and still pending listing of Metallon Gold on the JSE. Secondly, the tycoon’s current starring performance as a two-timing fellow in Harare’s High Court.
The two matters, as one will discover, are not unrelated. For a full flavour of the man’s social and corporate specialties, one needs an informed glimpse of a man whose first claims to fame were as Robben Island political prisoner and then KwaZulu-Natal African National Congress (ANC) treasurer.
In that role, Khumalo is said to have had his first spectacular fallout with Jacob Zuma, the fallen South African deputy president.
Gleason, meanwhile, revealed in a swansong Business Day installment in June how Khumalo became an instant billionaire by shady means in the “Simane affair” – a story worth a recap here, too.
In 2001, mining house Harmony had lined up a broad-based grouping of Free State mine workers and community organisations called Simane, to be its empowerment partner.
Simane then applied to South Africa’s Industrial Development Corporation (IDC) to assist in arranging funding for up to 21 million Harmony shares at a discounted R35 a share. As the deal was progressing, Khumalo – with a mix of what Moneyweb called “inducements, bullying and dubious tactics” — secured control of Simane.
The deal stipulated that the shares could not be traded for 18 months, but within nine months the mining entrepreneur contrived – with a part-role of Deutsche Bank – to cash in close to 11 million of the Harmony shares, at up to four-and-a-half times the purchase price, netting him R1 billion in profit and much of it off-shore.
Two IDC officials, who assisted Khumalo in pulling off the deal were Andile Reve, who has emerged as Metallon Investments (MI) chairman and Muvhango Netshitangani, who received a R6 million “loan” from Khumalo.
Reve is an active player in the tycoon’s group of companies, among them MI, while Netshitangani was last heard of reading for an MBA degree in Britain.
Wrote Gleason: “A formal complaint was laid by IDC officials with the Scorpions (South Africa’s supreme economic crimes-busting agency), led at the time by Bulelani Ngcuka.
“Nothing more has been heard of the matter and the. conclusion is that it has been swept under the carpet,” he added, recapping that Ngcuka was Kebble’s enemy and yet Khumalo’s friend.
He did not, however, mention that the IDC boss then, Khaya Ngqula, now South African Airways chief executive and a close Khumalo friend, with whom they had acquired holiday homes in southern France, canned the Simane/Harmony/IDC enquiry.
Back to Gleason’s obvious subtext: “.if you were Schabir Shaik (Zuma’s disgraced former financial manager) or Brett Kebble and you backed the ‘wrong’ political faction, you would be prosecuted by Ngcuka.
“But if you were Bulelani’s big friend, even rogues like Khumalo, you wouldn’t,” he noted.
This brings us to Kebble’s relationship with Khumalo. Like so many aspiring businessmen in political circles and party ranks, Khumalo was nurtured by Kebble.
While he has turned on his master, Khumalo continues to cheekily parody the maestro’s style. Khumalo also ran some rounds and learned lessons at McCarthys, one of South Africa’s big investment firms, and then as chairman of Capital Alliance.
But those were all largely figurehead positions. By joining forces with Kebble in a deal with Anglo American to take over mining group JCI Holdings (JCI), Khumalo thought he was acquiring a real stake in a company. But first signs that all was not well between patron and protégé – where the power really lay – Khumalo was in 1998 forced to resign as chief executive of JCI “amid accusations of mismanagement and conflicts of interest”.
In 2000, JCI sued Khumalo, in which it was claimed he still owed R30 million. Kebble claimed that they had guaranteed Khumalo by lending him JCI shares, but he never returned them. The tenacious businessman though, insists he never acted wrongfully.
The case only got to court in November 2003, by which time the debt, with interest, had grown to R50m.
“We held off for some considerable time because of Mzi’s apparent inability to repay at that time,” Keeble explained. Yet, by mid-2002 Khumalo had made a sneaky “R1-billion killing” by selling Simane’s Harmony shares.
The Simane/Harmony affair has provoked suspicions that the deal was more complicated and involved more players than meet the eye, and that the profits may have ended up not only in Khumalo’s offshore accounts.
It is intriguing how Khumalo could fail to cough up R50 million being the billionaire he was cracked up to be and why he was desperate for a postponement – duly assented by Keeble’s camp – of the JCI matter or dispute when it entered the courts.
Kebble, in return for upping his claim to R60 million, agreed to the postponement and it seems he had the squeeze on Khumalo. Only in September 2004, an out-of-court settlement was announced between JCI and Khumalo, and “no details of the settlement” would be released.
The brief statement also said no further public comments would be made. Apart from him taking ages to come up with the cash, it would be best for the Khumalo/Keeble financial arrangement and its features not to be disclosed to the public.
The arrangement does not mean Khumalo did not have some Harmony profits to spend, as he led in September 2002 a management buy-out of various African Harvest (AH) group divisions for R366 million. Some were sold and some incorporated into Metallon Corporation.
The silver cloud appears to have acquired a darker lining: African Harvest Holdings – the shell that stayed behind and owned by Coronation Investments, and Trading – is also claiming R40 million from Khumalo under a guarantee provision of the deal. – Noseweek-South Africa.