Influential Patriotic Front (PF) MP Given Lubinda has claimed that Vedanta Resources is likely to reject the government’s proposal that some of its shares in KCM be offered to the public. He described the Government's handling of the ZCI case and the Competition Commission's enquiry as 'really sad'. “What is more frustrating is that government acted against the advice of the Zambia Competition Commission (ZCC) to first look at the whole transaction before Vedanta could be allowed to take over the ZCI shares,” Lubinda said. “The decision government took to invoke section 3 of the Competition and Fair Trading declared the ZCC totally irrelevant in the governance of Zambia which is really sad.”
Lubinda chairs the economic affairs parliamentary committee. A long article in the The Post includes sections of a letter from 'a shareholder' in Zambia Copper Investments (ZCI) asking the government to coordinate the approach of Vedanta’s takeover of ZCI’s 28.4 per cent shares in Konkola Copper Mines (KCM). The whole letter was previously published on this blog. President Mwanawasa’s special assistant for Press and Public Relations John Musukuma told The Post that State House had not yet received the letter.
Commenting on commerce permanent secretary Davidson Chilipamushi’s statement that the government would compel Vedanta to offload some of its shares to the Zambian public, Lubinda said it would be very difficult for the company to offload part of its 79.4 per cent shares in KCM to the Zambians after concluding its Call-Option agreement entered into with ZCI about three years ago.
Chilipamushi said the government was discussing with Vedanta Resources Plc to compel the mining company offload part of the shares purchased from ZCI to the public. He said as much as Vedanta has successfully purchased 28.4 per cent shares in KCM previously held by Bermudan registered ZCI, the government could still negotiate for a certain percentage of shareholding to be held by Zambians.
But University of Zambia (UNZA) development studies lecturer Dr Francis Chigunta expressed doubt on whether Vedanta would agree to offload some of its shares to the Zambian citizens.
Vedanta held a Call-Option Deed on the 28.4 per cent of KCM owned by ZCI whereby they agreed that the latter, upon exit, would offer its 28.4 per cent shares in KCM to the former. The mining company has since concluded the deal and US $213.85 million (approximately K739.1 billion) has been paid to ZCI for the 28.4 per cent shares. Shareholders bitterly dispute the valuation.
1 comment:
Dear Minewatch readers,
A slight correction to the above text, the complete Presidential Communication sent on May 2nd has not been published as yet on Minewatch.
The author feels that his Excellency President Levy Mwanawasa and his Government services should have exclusive access to the 14 page document during the evaluation / investigation period required.
"The Post" requested elements of the communication a few days ago and these were furnished to assist in preparing yesterdays article.
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