South African gold major Gold Fields confirmed last week that the US Securities and Exchange Commission (SEC) was investigating the 2010 black economic-empowerment (BEE) transaction associated with the granting of a mining licence for its South Deep operation.

The JSE- and NYSE-listed miner said in a statement that the probe was at an early stage.

News of the investigation follows an article by the Mail & Guardian on September 6 which stated that the company had in effect bribed African National Congress (ANC) chairperson Baleka Mbete to get a licence for South Deep.

According to the weekly newspaper, Mbete was endowed a R25-million share allocation as part of the deal, following an “alleged threat by her representative”.
Gold Fields earlier this year commissioned US law firm Paul Weiss to investigate the transaction, but, according to the Mail & Guardian, the company “buried” a finding that the share allocation constituted bribery and ignored a recommendation to “self-report” the matter to the authorities.

The ANC, for its part, last week demanded a retraction of the story and an apology from the news- paper, describing the article as “flimsy” and “unsubstantiated”.

The ruling party said that the story failed to provide details on how, when, why and who Mbete supposedly bribed.

“The story is littered with innuendos and overt suggestions that the national chairperson would have used her power to sink the deal. “[By its own admission], the paper clearly states that it does not know how the national chairperson would have done this,” the ANC said in a statement.

In late 2010, the Department of Mineral Resources approved the terms of three new BEE trans- actions that would allow Gold Fields to meet its government- prescribed 2014 BEE requirements of at least 26% black ownership.

The first of Gold Fields’ BEE transactions entailed the establishment of an employee share ownership plan to transfer a 10.75% stake in the holding company, which controlled its South African assets, to employees. In a second transaction, the mining company was to issue about 600 000 shares, worth R60-million, to a broad-based BEE consortium. Lastly, the consortium subscribed for a 10% stake in Gold Fields’ South Deep mine – which would enable the operation to secure a new-order mining right – with a phased-in participation over 20 years.

“Given the early stage of this investigation [by the SEC], it is not possible to estimate reliably what effect the outcome this investigation, any regulatory findings and any related developments may have on the company,” Gold Fields said in a statement.