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Gupta-man tries to take over Optimum mine

A business rescue plan for Optimum Coal Mine is actually a smokescreen for the takeover of the mine by the Gupta family’s most important partner.

This is argued in an urgent court case that has been brought to thwart the business rescuers’ plan to transfer ownership of the mine to Daniel McGowan, an international businessperson whose holding company is registered in Bermuda and who, along with the Guptas, has been trying since 2013 to get his hands on mines that sell coal to Eskom.

Two of the Gupta brothers, Tony and Ajay, were both directly involved in this. Their son-in-law, Aakash Jagajgarhia, the groom at the infamous Sun City wedding, was McGowan’s partner in Centaur Mining.

At the time, Centaur held R1.2 billion in a bank account in Bermuda, which was used to provide guarantees for loans in South Africa with which the Optimum mine and the Optimum coal terminal were purchased.

This was one of four “money streams” created to take over Optimum in April 2016 with Tegeta Resources, a Gupta mining company in which Duduzane Zuma, son of former president Jacob Zuma, was also a shareholder at the time.

McGowan is now claiming R1.3 billion from Optimum for coal that Optimum did not deliver. The business rescue plan involves converting the debt into shares in Optimum, which will make McGowan the controlling shareholder in the mine and the coal terminal.

The mine has other creditors and the total debt amounts to R4 billion, but McGowan’s claim is the only one that will be converted into shares, according to the plan that the business rescuers want to implement, following a four-year process.

The other creditors, which include Transnet and Eskom, will eventually get back about R0.12 for every rand owed to them, but this will only be paid out when McGowan sells and exports coal from the mine over a period of five years.

Izingane Zetu Mining, which belongs to a trust that finances orphans and the homeless, made an offer to take over Optimum. It says that McGowan’s claim of R1.3 billion is fraudulent and meant to eliminate Izingane’s proposed takeover of the mine.

Izingane wants to operate the mine as a coal exporter and a supplier to Eskom. The mining engineer who designed Optimum is in the company’s employ.

However, Izingane was disqualified at a late stage of the bidding process, apparently because the business rescuers could not get a hold of anyone from Izingane.

However, Eugene Swart, a director of Izingane, says he was available at all times at the address and telephone numbers that the business rescuers have in their possession.

“The debt stems from the fruits of state capture, in which money was laundered by Griffin Line to transfer it to Tegeta. Tegeta and Oakbay [the Guptas’ holding company in South Africa] in all probability took even more money from Optimum than was pumped in from abroad by Griffin Line,” reads Swart’s affidavit submitted to the court.

“The business rescuers accepted the offer from Templar [a company owned by McGowan] due to fiddling in which the business rescuers waived a prerequisite that bidders for Optimum may have no ties with Gupta-related companies,” he said.

Swart approached the Pretoria High Court for an urgent application to stop the transfer of the mine and to dismiss the business rescuers of the Optimum companies and various other companies, so that new business rescuers could be appointed.

McGowan admitted to City Press’ sister publication Rapport on Friday that Centaur Mining had given guarantees for the loans with which the Guptas paid R2 billion to take over Optimum in 2014. Centaur invested R1.2 billion in a fixed deposit account with the Bank of Baroda.

“The money came partly from Griffin Line Trading, a Gupta front company in Dubai, but also from customers who paid in advance for coal and also from bonds issued on the Bermuda Stock Exchange” he told Rapport.

The guarantee was signed by Jagajgarhia, who is referred to as “Mr Garg” and who was a director of Centaur at the time.

McGowan said: I only found out later that he had issued the guarantee on behalf of Centaur.

According to testimony given before the Zondo commission in June by international corruption investigator Paul Holden, Griffin Line was a laundering business that was used abroad to launder money obtained through state capture and then to bring it back to South Africa.

Holden was appointed by the Zondo commission to head a team of investigators who tracked down the Gupta deals. According to him, R842 million was brought back to South Africa by Griffin Line through McGowan’s company to take over Optimum.

He calculated that the South African government lost R57 billion to the Guptas’ state capture efforts. His statement of more than 1 000 pages is also part of Izingane’s court documents.

On the eve of the sale of Optimum in April 2016, Eskom paid R659 million to Tegeta as an advance payment for coal that Optimum would deliver.

McGowan made a draft copy of his responding statement available to Rapport on Friday. In it, he argues that Izingane’s offer was rejected because the company could not provide proper evidence that it had the financing to cover Optimum’s operating costs.

Izingane did, in fact, provide undertakings from various banks and other finance suppliers that would give it access to about R800 million to put the mine into operation, but there were no guarantees that the money would be available.

McGowan also points out that none of Optimum’s creditors supports Izingane’s offer.

Kurt Knoop, one of Optimum’s business rescuers, said on Friday that he would submit a statement tomorrow in which he would respond to Izingane’s allegations.“It will take more than a day to read the statement,” he said.




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