Patrice Motsepe, the owner of African Rainbow Minerals (ARM), has rejected a $195 million (R3.4 billion) lawsuit filed against him and his affiliated companies.
Tanzanian firm Pula Group has taken legal action, accusing ARM of breaching a non-compete agreement by investing in Evolution Energy Minerals, an Australian company operating near Pula’s Graphite Project. The lawsuit, which claims a contract violation from 2021, alleges that Motsepe’s companies made an investment in Evolution, a direct competitor, while a confidentiality and non-compete agreement was still active.
The legal action targets Motsepe and his companies, including African Rainbow Capital (ARC) and ARCH Emerging Markets. ARM responded by saying that it was exploring investments in new minerals and, when presented with the Pula Graphite Project, initially entered into a Confidentiality Agreement with Pula. However, ARM ultimately chose not to invest in the project and informed Pula of its decision.
Charles Stith, chairman of Pula Group and former US ambassador to Tanzania, criticized ARC and ARM for their alleged disregard of corporate governance, stating that the lawsuit’s outcome would soon be decided by the courts. Stith questioned why, after being notified of the lawsuit, the boards of ARC and ARM did not take action to address the issue internally before it escalated.
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Motsepe has dismissed the lawsuit as groundless, calling the accusations offensive to the integrity and governance of his companies. At ARM’s annual general meeting, Motsepe expressed disappointment over Stith’s public comments and rejected the claims as an attack on the ethical principles of ARM and its associated businesses.
The South African billionaire explained that ARCH’s involvement stemmed from an agreement with an Australian company to acquire land near the Pula site. He clarified that ARM and ARCH had no direct communication or collaboration on the matter, other than his role as a shareholder in both companies. Motsepe further emphasized that the accusations of a non-disclosure breach or collusion were entirely unfounded.
Pula Group also accused Motsepe’s companies of using delaying tactics in the legal process, such as questioning the jurisdiction of Tanzanian courts and challenging the proper service of court documents. Motsepe has rejected these claims, asserting his companies’ commitment to defending their rights through legal channels and expressing confidence in a fair resolution of the case.
