London Calling - July 28 2002

London Calling July 28 2002

Scandals upon scandals

Greens used to call it "Bloody Nuclear Fools". Now it's looking like the British government should adopt the dunce's cap.

British Nuclear Fuels (BNFL) is one of the world's largest direct and indirect exploiters of uranium mining. Last weekend it was at the centre of a scandal which is being compared in some quarters with that of Enron. That's as may be - it certainly implicates ANDERSEN, the disgraced US accountancy firm which helped cover up Enron's deceits.. The British "Labour " government had planned to privatise BNFL but noone was interested -- not surprising, considering its mammoth liabilities for clean-up of its highly toxic nuclear sites which include uranium processing and enrichment, fuel rod manufacture and "reprocessing", as well as uranium powered utilities. Last year BNFL had to fork out nearly three billion pounds for additional clean-up costs, pushing the company into the red with losses of just over two billion pounds.

However, in reaching the scarcely earth-shaking conclusion that BNFL was a curate's egg, the British taxpayer - through the government's Department of Trade and Industry - has shelled out more than 18 million (yes million) pounds to accountancy firms and banks. (That's around twenty thousand quid for every Rossing miner likely to have been afflicted by radiation from the Rossing uranium mine during the early 80's - key supplier of yellowcake to BNFL). Nearly half of this (8.76 million pounds) went to Andersen. Just over 6 million pounds was paid to Credit Suisse First Boston for "services to BNFL", while HSBC and Ernst and Young also got pay-offs.

[source: Independent on Sunday, London 28/7/02]

CLUFF and SIMANE

Algy Cuff, chairman-owner of the rightwing London magazine The Spectator and of London-listed CLUFF Mining, is doing another deal. This time it's with Mzi Khumalo, the noted advocate of "black empowerment" in South Africa. Khumalo will get 17% of Cluff, in return for funding the company's platinum exploits. But Khumalo is already under a cloud in South Africa for selling 6 million of the ten million-odd shares he holds in black empowerment company Simane, which in turn had been invested in Harmony Gold mine. He was found to have used the shares to raise money for another of his business ventures. The South African government has demanded he return them to Simane.

Meanwhile London-based South African mining compaines have been shivering with the news that the government is proposing to be even more emphatic about reclaiming some of the profits of the industry for its citizens, than it was earlier this month. According to MiningWeb (rapidly becoming the most provocative and best informed mining industry website) the government plans a new Charter to place 51% of all new mining assest in the hands of poorer South Africans.

The "leak" sent the share price of ANGLO AMERICAN and XSTRATA tumbling on the London Stock Exchange, although the industry has chosen to interpret the proposal as an "extreme" gambit for further negotiation.

[sources: Mining Web; Financial Times 27-28/7/02]

RBG

Over the past few weeks news has emerged of yet another false accounting scheme - a la Enron and Worldcom - this time directly associated with the murky world of metals trading and linking US fraudsters with British company RBG Resources (not to be confused with RMG, the perfectly respectable concrete company). In May, four expatriate Indian Nationals were arrested in the US for false metals trades, said to have cheated various banks of up to one billion dollars in all. Commented James Comey, US attorney general for southern New York: "These folks lined up people in places that could only be reached by rickshaw, to pose as metal traders"

RBG is alleged to have helped arrange the fabricated trades. It's an accusation which should acutely embarrass the British government. Among the firm's henchmen and advisors were Jack Cunningham , a former Laour government cabinet minsiter; former conservative energy minister, Lord Gray and (wait for it!) - Lord Richard HOLME.

Holme acted as a consultant to RBG right up until last April, only a few weeks before the scandal broke.

RBG had, like Lakshmi Mittal's ISPAT, been eased into cheap business in Romania thanks to the good offices of the Blair regime, as a result of which it recently acquired a copper smelting and rod-making business in the east European state.

Among the banks supposedly "defrauded" by our friends was J P MORGAN CHASE - currently accused of complicity in concealing Enron's dirty deals. Not much sympathy there, surely? And at least a few rickshaw drivers in Asia must have gone home with extra rupees in their pants. As for Lord Holme, of course we must commiserate him on losing his commisions from RBG.

Perhaps he can console himself with his earnings as advisor to Rio Tinto and his status as vice chair of Business Action for Sustainable Development?

[source: Guardian May 15th 2002]

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