Patrice Motsepe has backed his investment firm, African Rainbow Capital (ARC), in its legal challenge not to be held liable in R3.4bn lawsuit initiated by a US-based company, Pula Group, in Tanzania against him and three of his affiliated companies. Pula Group, headed by former US ambassador to Tanzania Charles Stith’s daughter Mary, initiated the legal showdown against Motsepe, ARC, African Rainbow Minerals (ARM) and Arch Sustainable Resources in 2023. Pula Group accuses Motsepe and the companies of breaching a 2019 confidential agreement in a mining investment proposal in Tanzania for Pula Graphite.
Pula Group shared information with ARM in an attempt to get investment. There was no investment in the project. Motsepe, in an affidavit before the high court in Johannesburg, argues he never had sight of the confidential information and supports ARC’s legal argument not to be held liable for damages in the R3.4bn litigation.
The litigation was initiated after Arch invested in Australia’s Evolution Energy Minerals in 2021, which was involved in a graphite mine project, Chilalo, in the same area as Pula Graphite. Motsepe, who is a nonexecutive director of ARC, and executive chair and executive director of ARM, is listed as a second respondent in the damages claim in Tanzania. He argues he had no knowledge of Pula sharing its confidential information with ARM about the graphite project.
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“I have no personal recollection of having seen the first and second respondents’ [Pula Group] purported confidential information that was allegedly provided to [ARM manager] Mr Victor Moyo,” his affidavit reads. Motsepe supports relief sought by ARC, which is asking the high court to declare that ARC has no obligations arising from the agreement, cannot be in breach of the agreement and cannot be held liable by Pula Group and Pula Graphite Partners for contractual damages flowing from the alleged breach of the agreement. He argues that no records have been found to indicate he was aware of the confidential project information.
“I have caused a diligent search to be conducted of the records of ARM, and no record has been found to indicate that the information was at any stage transmitted to me or brought to my attention, other than by the way of the first respondent and second respondents’ disclosures during the course of the Tanzanian litigation.” Despite distancing himself from breaching a contract, Motsepe, ARM and Arch have had an unlucky run in the $195m legal battle in Tanzania. They did not defend the case, arguing they were not served correctly. Pula Group applied for a default judgment against the three. “I have never received the information electronically or otherwise (expect to the extent that the first and second respondents have shared it with me as part of the Tanzanian litigation) and nor have I passed it to anyone.
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