Johannesburg - After two years of controversy and uncertainty the Transnet Pension Fund has re-emerged as the owner of 6.64 percent of cellular group MTN.
The stake, with a current market valuation of an estimated R5.5 billion, was previously reported to have been sold on behalf of Transnet to Mtunzi, a black empowerment consortium led by Sandile Zungu, in a transaction that had been marred by allegations of conflicts of interest.
The MTN annual report for 2005, which has just been released, reveals that Transnet's pension fund is now the fourth- largest shareholder in the cellular group.
The largest single shareholder is Newshelf 664 with a stake of 14.8 percent, which is down from 18.6 percent in 2004.
The Public Investment Corporation has a 12.55 percent holding and Old Mutual has 8.7 percent. MTN's annual report for 2004 contained no reference to Transnet being a shareholder.
In addition, Transnet's 2004 balance sheet contains no MTN shares although it does make reference to an opening market valuation of R3.2 billion at the beginning of financial 2003 for its MTN shares and to the fact that 98 percent of this stake was sold during 2003.
In March 2003 then public enterprises minister Jeff Radebe said the government was trying to sell Transnet's remaining 4 percent stake in MTN. In 2003 Transnet had sold its 19 percent stake in MTN to Newshelf 664, a special purpose vehicle controlled by management and staff of the cellular group.
The remaining 4 percent that Radebe was putting up for sale was owned by the Transnet pension fund.
It is unclear whether the trustees of the pension fund gave the necessary approval for the disposal of the shares.
One empowerment analyst said yesterday that any empowerment group could have applied for the stake, which was the subject of a competitive bidding process. "I'm not sure how transparent the process was but it was competitive."
The major problem in doing an empowerment deal was that the MTN share price at the time was considered to be expensive and interested parties had difficulty in securing the necessary funding. One or two groups are believed to have approached Transnet for assistance in securing the funding.
Unfortunately for the empowerment groups and fortunately for Transnet, the MTN share price has appreciated considerably in the intervening period. In addition, it appears that Transnet has pushed up the pension fund's holding from 4 percent to 6.6 percents. This appears to have been done to address the fund's deficit.
Transnet financial director Chris Wells could not be contacted yesterday, but in a recent interview with the Financial Mail he said: "As far as Transnet is concerned there has never been a deal ... this is an important asset for the defined benefit fund."