Billionaire Patrice Mostepe, chair of African Rainbow Minerals (ARM), has lambasted Tanzanian firm Pula Graphite Partners for instituting a $195m (R3.4bn) lawsuit against his company in the East African nation, dismissing it as baseless and nonsensical.
Pula Graphite, owned by the former US ambassador to Tanzania, Charles Stith, lodged the suit after accusing ARM and its sister company African Rainbow Capital Holdings (ARCH) of breaching a confidentiality agreement regarding a proposed joint venture to develop a graphite mine in the east of the country.
Pula alleged that by opting to go into a deal with an Australian company, ARM was in breach of their agreement, which included non-disclosure, non-competition and standstill clauses.
In an affidavit filed in the commercial court in Dar es Salaam by Stith’s daughter Mary, who is president of the Pula Group, the company said it started talks with ARM executives in 2019 to explore a possible joint venture.
However, Pula said ARM and ARCH later partnered with Australia’s Evolution Energy Minerals to develop a nearby graphite resource in the country.
Responding to questions at ARM’s annual general meeting on Friday, Motsepe said the litigation was baseless and bordered on desperate.
ARCH has got absolutely no communication, no contact, doesn’t know and could not care a damn what ARM is doing, as much as ARM could not care a damn about what ARCH is doing. This whole thing is absolute rubbish, absolute rubbish
— Patrice Motsepe
“I have seen many far-fetched and I would even say desperate legal proceedings. In my mind this Pula matter is one of the most baseless and far-fetched actions I have ever seen,” he said.
Motespe said he met with Stith and was extremely disappointed with what he said publicly.
“I felt offended, in fact, more than offended, insulted because our integrity, our ethics, our governance and our good name is all that we have as a company and as a board.”
He said ARCH, concluded an agreement for a piece of land which is near to the land that Pula owns.There was no relationship between ARCH which concluded the agreement with an Australian company and ARM except that he as chairman is a shareholder in both, he said.
“They are alleging that ARM breached the NDA [non-disclosure agreement] and supposedly communicated with ARCH, which has got absolutely no communication, no contact, doesn’t know and could not care a damn what ARM is doing, as much as ARM could not care a damn about what ARCH is doing. What ARCH did was to conclude an agreement with an Australian company. This whole thing is absolute rubbish, absolute nonsense,” he said.
ARM would defend its rights in court, he said.
“We are in court; we will deal with this matter. It is a whole lot of absolute nonsense. We have got good management, good lawyers; we will ... uphold our good name and reputation, our reputation and good name is critically important, and we will pursue this matter to the highest court in Tanzania or any other court outside,” Motsepe added.
Tom Boardman, independent nonexecutive director of ARM, said there had been no need to raise provisions for the legal action.
“At the year’s end, the audit committee and management applied their minds as to the necessities to raise any provisions. We were clear as the audit committee and so were our external auditors that given the nature of the claim and where the proceedings are, and the different views on the serving of the summons and jurisdiction at this point, there was no need to raise any provision,” he said.
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