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Ndumiso applies for E450m loan in SA

07/08/2010 00:00:00 LUNGA MASUKU

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MBABANE – Former Minister of Justice and Constitutional Affairs Ndumiso Mamba and two other Cabinet ministers made a E450 million loan application with a South African financier to buy SAPPI Usutu sometime last year.

Swazi News can exclusively reveal that the bid by Mamba and the other ministers’ company was to pay E350 million for the mill and the extra E100 million was going to be allegedly used for other needs of New Forest, the company they owned.

Another former minister is part of the company. Mamba resigned as both minister and senator on Thursday.

Headlined

For now Swazi News can only name Mamba but the other ministers will be named as the story develops. According to a document showed to Swazi News, the application was headlined Ndumiso Mamba and six others.

Sources revealed that this is the company that is standing between the take-over of Sappi by a local consortium that offered E600 million to buy Sappi. Members of Parliament recently confirmed inside Chambers that certain ministers were now looking at taking over Sappi.

They viewed this as gross abuse of power.

As reported last week, it has been alleged in documents handed to the Parliamentary committee looking into the matter that a government official had offered to buy the Sappi village for E100 million.

Efforts to get Mamba for comment were unsuccessful as his phone rang unanswered. Commerce Minister Jabulile Mashwama stands accused of frustrating the consortium from taking over the company.

Her ministry is suspected to be in bed with the company owned by her colleagues. However, Mashwama refutes the allegations stating that her ministry was in no way involved in the sale transaction between SAPPI Usutu and a local consortium SOLSIBA that was offering E600 million for the company as a whole.

Mashwama said Sappi were the ones to decide which offer they were happy with.

Speaking to Swazi News from the US yesterday she said she had no interest in owning the SAPPI houses or even having an interest in any business transaction involving the company.

Authorised

She did not want to delve more on the Parliamentary order to withdraw a letter where she authorised Sappi to dispose off its assets. The letter was viewed as a ploy to frustrate the local consortium.

"I have been out of the country for the past two weeks. Check with the office of the Attorney General on whether the letter has been withdrawn or not. I am currently out of the country and I do not know how the matter has been handled by the office of the AG. I have no interest in such a business or want to own sawmill. Even if I had the money I do not think, I can be in a position to frustrate the transaction for personal business interests," said Mashwama yesterday.

Consortium was to create 3 000 jobs

MBABANE- Swazi News has reliably learnt that the local consortium, SOLSIBA’s proposal could have seen more than 3 000 job opportunities created in the first eight weeks of operation.

At the rate things were happening SAPPI was currently harvesting, exporting timber and it looks like the beneficiation set for 2012 may not be realised because most of the trees have been harvested and exported to South Africa.

The developments fit like a hand glove in the proposed plan if the utterances by the Group CEO Ralph Boettger are anything to go by.

Swazi News has gathered from informed sources that a local consortium failed to go ahead with the bid because SAPPI owed its former employees a sum of E500 million and should the local company takeover SAPPI at E600 million it would mean they must pay the ex-employees.

Retrenched

"On February 25, 2010 the Industrial Court of Swaziland made a judgement in favour of former employees. This meant SAPPI had to pay all its retrenched employees according to the agreed monies which amounted to E480 million. Instead SAPPI paid its retrenched employees E70 million and more than E400 million is still outstanding. The issues currently at play were in contravention of the Industrial Act of 2000 and it was very strange why government was failing to implement the motion by the House of Assembly," revealed a source.

According to a document in the possession of Swazi News from SOLSIBA ENERGY AFRICA, it states that the investor had already secured partnership funding through Kirsh Holdings and they were ready to take over the operations of the company.

The investment was estimated around E1.2 billion.

"Further to our presentation on the future of the Usuthu asset and having access to your letter dated August 28, 2009, addressed to SAPPI, where you discussed strategic goals of the government of Swaziland, we would like to formally advise the ministry that we have secured partnership financing through Kirsh Holdings Ltd. We also want to confirm that our strategy for this asset addresses all the 10 points contained in your letter to SAPPI.

Recognition

SOLSIBA made a plea where they sought to get recognition as the preferred strategic partner to buy this asset from SAPPI and develop the bases of their strategy presented to SAPPI Usutu.

"We have been advised by SAPPI that as they have an exclusive agreement with New Forest they had conveyed to yourselves that your formal advise to them that you prefer SOLIBSA’s investment plan they will terminate existing agreement and accept our purchase offer.

We confirmed that our offer was going to be handed over to Sappi on March 1, 2010 and the offer price was E500 million excluding villages that had been offered to a government official for E100 million. This was communicated to Sappi and a copy of the business plan given to the Ministry of Commerce advising them of a successfully completed exercise," reads a document that was presented to a special parliamentary committee on Sappi Usutu’s sale transaction.

E1.2 million to dismantle Sappi mill

MBABANE- Despite Sappi General Manager Shane Perrow stating that his company has no intention of dismantling the mill, the Swazi News can reveal that plans to undertake such a project were initiated early last year.

A classified document in the possession of Swazi News indicates that the company had set aside a sum of E1.2 million for the dismantling process.

Assumptions

The document states that assumptions indicate that the village should have been sold by September 30, 2011.

"The villages should be sold by end of September 2011, with construction of the new saw mill set to start on October 1, 2010 and the project scheduled to be completed by January 2, 2012. The demolition costs amount to E1.2 million."

Comments

If this is true that Mr. Ndumiso Mamba wanted to be one of the people to take over, it would have been really good because we know him as a very humble and a man with good visions and good dreams in busines. I don't know the other ministers but he has made a good name for himself. It's a pity that this would be seen as gross abuse of power but for Swazis we need SAPPI to be opened and by Swazis. I wish Mamba all the best on his vision.
August 7, 2010, 12:26bpm, Thami (Martin.Gwebu@lumwanamine.com)

We are being led by a corrupt government! These are the people who are frustrating the Anti Corruption Commission! This is the time for Sbusiso to act. If he can force Ndumiso to resign surely he can do the same to the other corrupt people posing as ministers. Isiah Ntshangase must be fired, Sobantu must be hauled before the ACC for corruption in the army, Isaac Magagula must follow Jackie Selebi, Sibusiso must resign for his shares at MTN, Ministers who are directors of Microlending companies must be dealt with. Mr editor this a sick country. No wonder ministers give unsatisfactory answers everytime they are hauled before parliament. This is a sick country, sick regime, sick society. Ministers are appointed to frustrate the masses! The country must return to its rightful owners, The People. We see a reincarnation of apartheid judge DJ Curlewis in the bomb suspects cases. They have been convicted already from what Nkululeko Hlophe has said! Nkululeko is appeasing his political masters/handlers. This is a corrupt country! In my opinion Tinkhundla must go, period!
August 7, 2010, 12:28 pm, velaphi dlamini (d.velaphi@yahoo.com)

I think it's about time the Swaziland Government "got tough" with Sappi and told them which side of the river they should be on!! The important thing is to get the people back to work and if Sappi are deliberatly obstructive to the detriment of the country as a whole nationalization should be threatened with payment made to them when the country could afford it.
August 7, 2010, 4:47 pm, John Carver (Ex Purchasing Manager 1986 - 1993) (johnkcarver@hotmail.co.uk)

Siyabonga that their transaction couldn't go through. Is this part of the reasons he resigned. Pls tell us as you didn't post yesterdays comments on the Ministers resignation, why why?
August 7, 2010, 6:50 pm, anthony Dlamini (anthony_dlamini@wvi.org)

As a Metallurgical Engineer, I wish to mention that plants that have not been sufficiently prepared and properly "mothballed" have a tendancy to undergo "off-load" corrosion, i,e during the long idle periods of months and years. Once these plants are started up, there is one big surprise that pops up, that is an abundance of "corrosion leaks" - all over the place and in particular at the boilers. The longer the idle period (wait) the worse this effect will be !!! and the costs will rocket !!!!
August 7, 2010, 6:58 pm, Loucas Kometas (metfocus@metfocus.co.za)