South African billionaire businessman Patrice Motsepe is fighting back against R3.4 billion lawsuit over non-compete claims.
Image: Jeffrey Abrahams/African News Agency
Patrice Motsepe, the owner of African Rainbow Minerals (ARM) has pushed back against the $195 million (R3.4 billion) lawsuit that has been filed against Motsepe and his associated companies.
According to an IOL report, Tanzanian-based Pula Group has filed a $195 million (R3.4 billion) lawsuit that alleges that ARM breached a non-compete agreement by investing in Australian firm Evolution Energy Minerals which is operating adjacent to the Pula Graphite project.
The lawsuit stems from an alleged breach of contract in 2021 where Motsepe's associated companies invested in Evolution, a competing graphite mining project, while a confidentiality and non-compete agreement was allegedly in force.
The legal action was filed against Motsepe and his associated companies - African Rainbow Capital (ARC), and ARCH Emerging Markets.
ARM said it was considering investing in minerals that it had not mined in the past when the Pula Graphite Project was presented to it for its consideration.
ARM concluded a Confidentiality Agreement with Pula but thereafter decided not to invest in the Pula Graphite Project and communicated this decision to Pula, according to the ARM spokesperson.
According to Charles Stith, chairman, Pula Group and a former US ambassador to Tanzania, the conduct of ARC and ARM cast serious aspersions on the boards of the respective companies' compliance with good governance.
Stith said they are at the point where the matters in the lawsuit are soon to decided by the courts. While Motsepe is an individual and ARCH is a privately held company, both ARC and ARM and publicly traded companies.
Both boards have a fiduciary responsibility in this issue, so it is interesting that after being informed about the legal action, they did not charge executives to try to solve the lawsuit before this point, according to Stith.
According to a Sunday Times report, the businessman dismissed the lawsuit against him and his associated companies as baseless and nonsensical.
At the ARM annual general meeting, Motsepe said that he was disappointed with the public statements from Stith and was critical of the accusations as an affront to the integrity and governance of the businessman's companies.
The South African billionaire described the allegations as an insult to ARM's ethical foundations and its associated entities.
According to Motsepe, the involvement of ARCH emanates from an agreement with an Australian company to acquire land near the Pula site.
The businessman emphasised that ARM and ARCH were not connected or communicated in regards to the issue other than his role as a shareholder in both companies.
Motsepe said that ARCH concluded an agreement with an Australian company but stressed that claims of collusion or breach of a non-disclosure agreement were baseless.
Pula has also alleged that the Motsepe group of using delaying tactics such as challenging the jurisdiction of the Tanzanian courts as well as accusations of incorrect service of court documents.
Motsepe has dismissed these claims and affirmed the commitment of his companies to defend their rights through legal channels.
The businessman has maintained that there was no wrongdoing and expressed confidence in the legal system to sort out the matter fairly.
IOL Business