Andile Ramaphosa hires law firm to probe his business partnerships
In a bid to clean up his image businessman Andile Ramaphosa, son of President Cyril Ramaphosa, has cut ties with a Chinese businessman implicated in state capture allegations.
In a media statement released on Monday, Andile said he has also hired a law firm "to assist with the review process which will carry out due diligence investigations on all my previous and current business partnerships and to devise a risk management framework going forward to identify and eliminate unethical and potentially questionable relationships".
He cut ties with Jianbao Chen, chairman of Chinese company Huarong Energy Africa, after the company was alleged to have given Eskom a R25bn loan without the power utility following due processes.
Andile said their relationship dates back to January last year when his Blue Crane Capital partnered with Chen, to form a company called Blue Tree International, noting that the partnership was formed with the purpose of acquiring a majority shareholding stake in Mercantile Bank, which was up for sale at the time. Ramaphosa jr however pulled out of the bid after careful consideration.
He added that if the bid for Mercantile Bank had been successful, the partnership would have resulted in him owning 13% of the bank, with Chen owning the majority 87%.
Chen, who leads Hong Kong-listed company Sino Energy International, among other business enterprises, "was able to validate his financial muscle through the strength of his balance sheet – about R2bn was required to acquire Mercantile Bank".
"The introduction to Chen came through the China Export and Credit Insurance Corporation via our China office. We were able to verify Jianbao’s legitimacy as a businessman and to ascertain his financial capability.
"Furthermore, the pre-bid screening by Deutsche Bank, who were the mandated advisors to Mercantile Bank, did not raise any suspicious detail about Chen and his Huarong Energy Africa business, nor did law firm Edward Nathan Sonnenbergs, which was engaged to act on our behalf in the bid process, pick up any concerns.”
The review process of his business operations comes after he admitted last week that Blue Crane had received R2m from the controversial facilities management group Bosasa, which gets a large chunk of its business from the government. Bosasa also paid R500,000 towards Cyril Ramaphosa's campaign to become ANC president in 2017.