State faces R8bn claim in biggest BEE dispute
Publish date: 13 April 2007
Issue Number: 1804
Diary: Legalbrief Today
Category: General
In what Business Day says is the largest legal dispute over an empowerment deal to date, Transnet and the government are facing an R8bn legal claim from prominent businessman Sandile Zungu over a soured deal involving the sale of 80m shares in cellphone company MTN.
It says the dispute arose after Transnet said in April 2004 that it had picked Zungus Umthunzi Telecoms from 10 other bidders to buy the shares equal to 5% of MTNs total shareholding from Transnet. Zungu said he shook hands with the government in 2004 over a deal that would have seen Umthunzi pay R29.51 for each MTN share. However, the government backed out when the MTN share price rocketed, and the parastatal apparently realised it could make more money by selling the shares in the market. In February last year, Transnet simply sold the shares for R65 each in the market making itself R5.2bn in the process and it seems neither Public Enterprise Minister Alec Erwin nor Transnet CE Maria Ramos seriously believed Zungu would take the matter to court. However, papers were served on the government and Transnet this week, setting the stage for what is expected to be a groundbreaking lawsuit. Full Business Day report
