JOHANNEBSURG (Reuters) - South Africa's Public Investment Corporation said it opposed a black empowerment deal proposed by ArcelorMittal South Africa and questioned the ethics of the transaction.
State-owned PIC, Africa's biggest pension fund manager, is the latest of several minority shareholders to oppose the 9.1 billion rand deal, which seeks to empower some black investors including President Jacob Zuma's son, Duduzane.
Sanlam, the country's biggest insurer and another minority shareholder, said last week the planned offer of a 26 percent stake to black investors in the South African unit of top global steelmaker AcelorMittal was not transparent.
South African companies must meet government quotas on black ownership to widen ownership of the economy, which is still mainly in white hands 16 years after the end of apartheid, but the ArcelorMittal deal has faced criticism for favouring political elites.
The deal, also opposed by RMB Asset Management, is seen to benefit some officials of Imperial Crown Trading (ICT), which ArcelorMittal has said it aims to buy.
ICT was awarded a disputed prospecting right for a stake in Kumba Iron Ore's Sishen mine, over which ArcelorMittal South Africa previously held a mining right it failed to renew.
ArcelorMittal said on August 10 it would buy ICT to get control of the lost stake in the Sishen mine to be able to source iron ore from Kumba at a discount.
PIC said it opposed the ArcelorMittal empowerment deal and its decision to buy ICT because of the controversy surrounding the proposed transactions. Kumba is contesting the government's award of a prospecting right to ICT in court.
"PIC has therefore decided not to support the deal until these and other perceived irregularities are resolved," it said in a statement seen by Reuters on Tuesday.
ArcelorMittal South Africa spokesman Themba Hlengani said the company would not comment on individual shareholders' concerns as a formal proposal had not been presented to all shareholders for consideration.
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