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Zungu denies political connections in ArcelorMittal deal

15 August 2010 - 02:00 By CHRIS BARRON

When Jagdish Parekh invited Sandile Zungu to lead the Ayigobi consortium, he knew exactly what he was doing.

Zungu, 43, is a business leader and he is very close to President Jacob Zuma.

He helped bankroll Zuma's campaign for the presidency, lobbied his fellow business heavyweights to support him and talked him up at every opportunity.

What was he hoping for in return?

"Nothing at all," he said, with a straight face.

In that case, the award to his consortium of a R9-billion, 21% stake in ArcelorMittal South Africa this week would have come as a pleasant surprise. He said that was "money for jam".

Cynics said with the president's son Duduzane as a member of the consortium, Zungu, Parekh and the Guptas couldn't lose.

Zungu said political connections had nothing to do with it.

"Duduzane is a very young but extremely bright fellow, and in my encounters with him I have been absolutely enthused by the potential he possesses."

Zungu said he had nothing to do with bringing the president's son into the consortium. Parekh and the Guptas did that.

Zungu said he didn't see what the fuss was about. ''What's wrong with a president's son having ambitions to be a business person?"

What else did he think qualified the young Zuma for a place in his consortium?

"He is an extremely industrious, hard-working fellow.

Trying to dispel any notion of opportunism or nepotism, he added that Duduzane "was trying to make ends meet in business long before his father was even president of the ANC".

He has certainly made those ends meet now.

Zungu, on the other hand, handsomely as his loyalty to Zuma seems to have paid off, would have made ends meet with or without him. He would have shone anywhere in any company and just about any circumstances.

Born and bred in the Durban township of Umlazi, where his father was a factory worker and his mother a nurse, he matriculated at Vukuzakhe High School with such flair that he was offered an engineering bursary by Shell.

Shell sent him to do post-matric at Hilton College before going to the University of Cape Town, where he graduated in mechanical engineering.

He left engineering to do an MBA at UCT, and then helped his childhood "idols", Cyril Ramaphosa and then presidential economic adviser Wiseman Nkuhlu to raise capital for the purchase of Johnnic by black empowerment groups.

He built the trade union-owned Sarhwu Investments from a zero capital base to a company with a net asset value of about R400-million. And in 2000 he completed the Harvard Business School's programme for global leadership.

He founded investment company African Vanguard Holdings which invested in sectors across the board, including mining.

In 2003, he put together a consortium that bought an empowerment stake in a uranium venture which, after going nowhere for six years, was sold to Parekh and the Guptas. This is how he got involved with them and through them met Duduzane.

"They were honorable people, they paid us on time," he said.

Less honorable, he thought, was state-owned Transnet, which sold MTN shares he thought were rightfully his on the grounds of his Umthuzi Telecommunications Consortium being chosen as a preferred bidder for those shares.

Transnet told him to get lost. He took them to court and last year, after a six-year battle, was awarded a R62-million out-of-court settlement.

Thabo Mbeki's government recognised his talent and made him chairman of the troubled state arms manufacturer Denel when he was just 34. He has had a string of directorships and was also chairman of Barnard Jacobs Mellet Holdings.

He has accompanied president Zuma on most of his foreign business trips, including to the UK and Brazil. A more impressive advertisement for home-grown business talent would be hard to find.