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UPDATE 2-South Africa's Ramaphosa to exit stake in Shanduka
May 26, 2014 / 4:01 PM / 3 years ago

UPDATE 2-South Africa's Ramaphosa to exit stake in Shanduka

(Adds Ramaphosa statement)

JOHANNESBURG, May 26 (Reuters) - Newly appointed South African Deputy President Cyril Ramaphosa will divest from Shanduka, the black investment firm he founded more than a decade ago, to avoid conflicts of interest with his government duties, the company said on Monday.

Shanduka, which is 25 percent owned by China’s sovereign wealth fund, also said it would merge with another prominent investment company, creating what is likely to be South Africa’s largest black-owned private investment group.

Shanduka will merge with Pembani, a company controlled by former MTN Chief Executive Phuthuma Nhleko, to create a firm with 13.5 billion rand ($1.30 billion) in gross asset value.

Shanduka, which means “change” in Ramaphosa’s native language of Venda, has stakes in Lonmin Plc, MTN Group and the local operations of McDonald’s Corp.

Ramaphosa founded the company in 2001 after he left politics to pursue a career in business that has made him into one of Africa’s richest men.

A lawyer by training, Ramaphosa started in politics by building and heading up the powerful National Union of Mineworkers - which played a critical role in the toppling of white minority rule in 1994.

He returned to politics in late 2012 when he was elected deputy president of the ruling African National Congress. President Jacob Zuma on Sunday named him as his deputy president, in a decision likely to go down well with investors and the private sector.

Since his return, Ramaphosa has resigned from the boards of several major South African companies, including MTN and Standard Bank.

“This transaction is the culmination of a review of my business interests that I initiated soon after my election as ANC Deputy President,” Ramaphosa said in a statement. “It enables me to leave Shanduka and eliminate any conflicts of interest.”

In addition to China’s sovereign wealth fund, the other shareholders in Shanduka include Ramaphosa’s family trust and Standard Bank.

His family’s interests would be held in blind trusts in the interim, Ramaphosa said in a separate statement.

$1 = 10.3574 South African Rand Reporting by David Dolan; Editing by Ed Stodddard and David Evans

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