SA firm alleges smear campaign in Indian acquisition plans

Wednesday, 25 June 2003, 07:00 Hrs
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A top South African company has alleged that an anonymous smear campaign originating in Hyderabad is aimed at jeopardizing its acquisition of a stake in Indian company Godavari Fertilisers and Chemicals (GFC).

JOHANNESBURG: A spokesman for the Industrial Development Corporation of South Africa (IDC) said here that the company and its chief executive, Khaya Ngqula, were being targeted, as an IDC subsidiary company, Foskor, made a bid for 26 percent of GFC.

Foskor has vowed to ferret out the source of a document faxed from an Internet kiosk in Hyderabad to leading South African daily Business Day and to IDC chairperson Wendy Luhabe.

The company said the information contained in the anonymous fax could only have come from someone with deep knowledge of or involvement in the acquisition negotiations.

The IDC is proposing to offer a little more than 100 million rands for its stake in GFC, with a due diligence process currently under way. This process involves leading accounting and legal firms in South Africa.

Foskor chief operating officer Carlos Galego told the Business Day: "The points which were identified in the faxed letter (from Hyderabad) were not news to us - they had all been highlighted (in the due diligence exercise).

"Whoever wrote the letter must have been involved in the process - it contained information that you would only have known about if you had access to the information we have been gathering. We are using our own intelligence network to try to identify who was behind this."

Galego added that the fax might have been aimed at "squeezing Foskor out of the race." Four other parties, two of them considered to be serious contenders, are vying for the acquisition.

The allegation that the anonymous letter was aimed at discrediting Ngqula was based on a statement in the letter that said that he "is keen to build a global empire for himself and project his own personality rather than protecting South African industry".

Galego said the acquisition of a stake in GFC would help Foskor secure a wider international market for its products.

"We would do the last value-adding stage of production in the country of destination. It is a difficult market, and you want Indian partners."

Godavari could give Foskor a foothold in the lucrative Indian market for its fertiliser products from a plant in Richards Bay.
Source: IANS

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