Gold Fields faces SEC probe over black-ownership deal

Are gold producers turning the page on hedge book?

Shares in South African bullion producer Gold Fields (NYSE:GFI) fell to the lowest in a month Tuesday after the miner confirmed it is the subject of an ongoing probe by the U.S. Securities and Exchange Commission (SEC) over a 2010 black-ownership deal.

The stock dropped from $5.24 to $5.08 at 9:42 am ET, minutes after the company announced the SEC is trying to determine whether the black economic empowerment (BEE) deal helped Gold Fields to secure its mining license for the South Deep operation near Westonaria, southwest of Johannesburg.

Gold Fields faces SEC probe over black-ownership dealAt the time, South Africa’s second biggest gold producer gave a 9% stake in South Deep to a group of black investors in order to meet government’s regulations aimed to boost black ownership in the post-apartheid country.

News of the investigation comes on the heels of an article published last week by the Mail & Guardian, which stated that the company had bribed African National Congress’ (ANC) chairperson Baleka Mbete to get the mentioned licence.

But the ANC slammed the allegations made in the M&G report, saying that it was “sensational, defamatory and slanderous.”

“Nowhere in the story are these claims that the ANC national chairperson was bribed proven nor at the very least substantiated. Nowhere in this story is it reported how, when, why and who bribed the ANC national chairperson.

Inconveniences like facts are ignored by the Mail & Guardian because through the headline alone the damage the paper sought to create has been done,” ANC spokesperson Jackson Mthembu said in a statement Tuesday.


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