sa sunday times article

BASETSANA Kumalo, former Miss South Africa and über-successful businesswoman, is at the centre of a spat between empowerment shareholders of the newly launched, JSE-and Australian-listed Waterberg Coal Company over a coal-rich property in Limpopo.

Waterberg Coal, which listed last year and is now worth R292m, has a lucrative deal to provide beleaguered power utility Eskom with coal for the next 30 years.

But this ill-tempered dispute, involving hundreds of millions of rands, has driven a wedge between high-profile members of South Africa’s black-empowerment elite, eager to cash in on South Africa’s coal boom.

Kumalo’s empowerment company, Uzalile, formed a joint venture with a company run by high-profile entrepreneur Tim Tebeila, which saw the two partners control the Vetleegte farm, which ultimately folded into Waterberg.

The farm was valued at R371m, putting Uzalile’s 60% stake in the farm at about R222m.

Now Kumalo claims that Uzalile was short-changed in the valuation of the farm, and wants to extricate her 60% shareholding in the Vetleegte farm, a messy process that would mean that the deals struck with Tebeila would have to be unwound.

The spat between Kumalo and Tebeila has destroyed the once-close friendship. Tebeila’s wife, Pollet, is ironically still a partner in Uzalile with Kumalo and businesswoman Lindiwe Leketi.

Tebeila, who is chairman of JSE-listed Firestone Energy, is also CEO of Firestone’s empowerment partner, Sekoko Resources. The Tebeilas, like Kumalo and her husband, Vodacom executive Romeo Kumalo, are frequently seen at high-profile events.

Tebeila has made headlines with his philanthropic Tim Tebeila Foundation, which boasts that it is run according to the biblical premise that “it is more blessed to give than to receive”.

This messy dispute dates back to 2006, when Tebeila and Kumalo first tied their companies together in an extremely complicated way.

First, the farm Vetleegte, which is 60% owned by Uzalile and 40% by Sekoko, was joined with Sekoko’s farm Oliesboomfontein. At the time, Vetleegte was valued at R35m while Oliesboomfontein was valued at R38m, which led to Tebeila becoming the majority owner.

Around 2010, another deal was done in which 55% of the Vetleegte/Oliesboomfontein farm was sold to Firestone Energy for R73m.

Now Kumalo claims Vetleegte was undervalued at the time. A new study put a R371m value on Vetleegte while radically reducing the value of Oliesboomfontein to only R1.2m.

Using this new valuation, Kumalo’s Uzalile consortium should have been the 60% owner of the combined farm rather than a minority shareholder.

This week, Kumalo and Leketi said that they believed Tebeila had pushed through the agreements, while the true value of his Oliesboomfontein farm was a mere R1.2m.

Tebeila referred questions to Waterberg Coal Company CEO Stephen Miller. Sekoko chief financial officer Amanda Mathee said the issue was sub judice, but that “disparaging allegations made about Dr Tim Tebeila (would) be challenged and damages ... sought”.

This dispute even found its way to the Department of Mineral Resources, which ultimately agreed with Kumalo’s Uzalile. It said Uzalile should reclaim its 60% of Vetleegte.

“The agreements ... are of no relevance ... and will have no effect on the prospecting right,” it ruled.

This, however, did not put an end to the tussle. Instead, lawyers for Tebeila’s companies said earlier this month that Uzalile had signed the documents, accepted the sale proceeds and attended the Firestone annual meeting in Perth when the deal were approved.

Tebeila’s lawyers said that Uzalile’s shareholding in the farm was also agreed on by Uzalile shareholders.

Last year, Miller offered Uzalile R10m for its 60% of Vetleegte. Uzalile declined the offer, given that the valuation suggested this stake would be worth R222m.

On Friday, Miller said he had “tried to mediate for Tim ... The R10m offer was part of the mediation process”.

While this toxic battle between Waterberg’s empowerment shareholders continues, Miller said the dispute wouldn’t affect the Waterberg Coal Company.

“It’s a skirmish on the sidelines between Tim and Bassie,” he said.