South African police to investigate Gold Fields South Deep deal

Reuters News
Posted: Sep 30, 2013 2:38 AM

JOHANNESBURG (Reuters) - South Africa's elite anti-corruption police unit said on Monday it was investigating possible graft in a $210 million black empowerment transaction at Gold Fields involving a senior member of the ruling African National Congress (ANC).

The investigation comes on the heels of a similar probe by the U.S. Securities Exchange Commission into the dual-listed, Johannesburg-based bullion producer.

The 2.1 billion rand 2010 deal saw Gold Fields hand a 9 percent stake in its South Deep mine to a group of black investors to meet black ownership targets set by the government to redress the inequalities of white-minority rule.

However, the deal has come under intense scrutiny because one of its main beneficiaries is ANC chairwoman Baleka Mbete. Others are relatives of anti-apartheid heroes including Nelson Mandela.

"We are not really vocal on the matter because there is no formal criminal case opened yet but we did receive those allegations and we are looking into them," said Paul Ramaloko, spokesman for the anti-corruption unit known as The Hawks.

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The ANC's black economic empowerment (BEE) push is often criticised as benefitting only a narrow, politically connected elite. It is also seen as a major source of the many corruption scandals that appear in local media.

Few of the scandals result in prosecution.

Mbete has declined to comment on previous reports about the deal.

($1 = 10.0775 South African rand)

(Reporting by Helen Nyambura-Mwaura; Editing by Ed Cropley)