WITNESS STATEMENT OF MARIO VITTORIO MARCENARO
1. Introduction
1.1. I am the de facto CEO of Finstone s.a.r.l. ("Finstone"). Its shareholders have authocized me to act as an intermedtary on their behalf in discussions with the Government of South Arica ("the Government") in these proceedings. From time to time, I have also acted as an intermediary for RED Graniti and its shareholders in discussions with the Government.'
1.2 This statement deals with the following:
1.2.1. The fact that bringing a claim under the bilateral investment treaties
- was the only way we could convert cur "old order mining rights" to prospecting and mining rights under the Mineral and Petroleum Resources Development Act, 2002 ("the MPRDA") without suffering substantial tosses. Before taking this step, all our efforts to get the Government to address our concerns were unsuccessful;
1.2.2. The Claimants did not want to withdraw the claims until the completion of talks between the Claimants and senior Government officials on possible terms for withdrawing the claims by agreement. These talks continued until the end of October 2009 (i.e. almost to the date for filing of the Claimants Reply Memorial):
1.2.3. the workshop that was supposed to take place in July 2007, and the reasons why this workshop was cancelled; and
1 .2.4. my interactions with Mr Seth Nthai SC ("Nthai") a senior lawyer in the Government's legal team until his dismissal, in which he requested personal payments for facilitating the settlement of the arbitration proceedings.
1.3. A draft of this statement was prepared by our lawyers after telephone conversations and a detailed in-person discussion with me, and after...
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7. Mr Seth Nthai SC's attempt to solicit a bribe from the Claimants
7.1. It is clear from what said above about our interactions with the Government that we were getting conflicting messages from different people within the Government about its position in the case. We did not know whether the dog was wagging the tail or the tail was wagging the dog. It was also not clear whether the new Minister of Trade and industry was kept properly informed. This case went back a long time, over many years, and some of the historical memory of the case, including the period before we filed our request for arbitration, may have been lost.
7.2. We now had a constructive relationship with the DMR, so much so that at a meeting that Jacinto Rocha arranged in Pretoria to discuss the technical details of our conversion applications on 11 April 2009, he said that from the DMR's perspective, we now had a good relationship ar1d that he would be happy for the proceedings to end on the basis that each party would pay its own legal costs.
7.3. Despite both Sharma and Rocha, the key Government officials with whom we had been dealing since we began discussing this matter with the Government in 2004, saying that they were happy for the proceedings to end with each party going their own way and with no order on costs, for some reason, we could still not get an agreement with the Government. In fact, even now the DMR appears to believe that the matter is in the process of being settled. In a recent Financial Mail article, in fact, Sandile Nogxina stated that he believed that the matter was in the process of being settled and confirmed that we currently have a good relationship with the DMR.
The article is attached as MVM 7.
7.4. As said above at paragraph 5.5.2, l only found out that costs would be a sticking point when our lawyers told me that FBD had told them on a case in May last year that the Government expected the Claimants to pay the Governments' legal costs, and if they did not, they would not agree to withdraw the proceedings and the proceedings would go on.
7.5. The last thing I wanted to do was to reopen a wound with the DMR that had been nicely healed, On the other hand, we were not prepared to pay the Government's costs in a case that we were forced into reluctantly. Apart from all of the costs we had incurred, this case has taken a huge amount of management time at a very senior level from what is, at a management level, actually quite a small team.
7.6. Due to the different messages we were receiving from Government I tried to find out directly what was going on. We could not ascertain what was actually going on, but it seemed as if someone might have an agenda against our companies as they say in Italy, there was someone who wanted to ‘take a stone out of his shoe", or someone had a financial interest in keeping the case going. In any event, we suspected that the case was not being portrayed correctly to the ultimate decision makers, the Minister of Trade and industry (and to some extent the Minister of Mineral Resources), and ultimately the Cabinet and the President. This seemed the only explanation for why we could not obtain an agreement on withdrawal.
7.7. In the past, Maurizio Mariano, a lawyer who is one of the key players in a community organization in South Africa called the Hellenic, Italian and Portuguese Alliance (‘the HIP Alliance')'3 had been successful in arranging meetings for us with senior government officials when there were major issues to discuss, because of his prominent position in the Italian, community. Maurizio had twice managed to set up meetings with the previous Minister of Trade and Industry, Mandisi Mpahlwa, to discuss the matter.
7.8. I called Mariano in early October 2009 and explained that while we had now largely received what we were asking for, there was still an issue as to the costs of the proceedings. I asked him whether he could arrange a meeting between the new Minister of Trade and Industry, Rob Davies, and us, to discuss the matter. I told him that my feeling was the Minister was not really properly informed about the case and I wanted to meet with him to try to determine whether he was in possession of all the facts, going back to the beginning of the case. I said that I found it very strange that all of those who had been involved from the beginning of the case, especially Sandile Nogxina and Jacinto Rocha in the DMR and lqbal Sharma in the DTI wanted the case settled, and yet there was no settlement. Mariano said that he was working with Seth Nthai, SC on other matters, and he knew Seth was working on the case, so he suggested setting up a meeting with him.
7.9. I had met Seth Nthai only once before, at the first session of the Tribunal in London, so I knew he was involved in the case. We would talk to anyone to get an amicable outcome everyone from the Deputy Presdent (whom I had met in Italy to discuss the case) down to the last Government official. I do not have a closed set of people who I talk to, so I said sure, I will meet with him. Maurizio Mariano then arranged a meeting with Nthai for Saturday 10 October 2009 at his offices in Johannesburg. I told the Claimants and some of the senior management within the companies that I had arranged a meeting with Nthai, including Livio Zucchini of RED Graniti and Shawn Donly, Finston's legal adviser. Shawn Donly has told me that he mentioned to our external lawyers, Webber Wentzei that I would be meeting Mr Nthai socially that weekend, but did not indicate to them that the proceedings would be discussed at this meeting.
7.1.0. On Saturday 10 October 2099, Nthai and I met at Mariano's offices in Johannesburg. Mariano did not attend the meeting, but merely introduced us and then left to attend to other business. Nthai and I spoke about the proceedings generally. I asked him about the mixed signals on costs taken by Sharma, on the one hand, and the Government's external lawyers in Paris, FBD. on. the other. Nthai confirmed that there was a faction within Government which wanted the matter settled, and another which wanted to pursue the matter to finality. He said that the DMR were keen to see the matter settled and they had actually recommended that the matter should be settled on the basis that each party paid its own costs. Nthai said that some in the Government felt strongly that the Government should go for costs against us to "make a statement', so the case would in all probability carry on.
7.11. I was not prepared for what Nthai said next: he said that for him personally, it was better if the case continued because he was making a lot of money out of it. He said that he was an influential member of the Governments legal team. I then asked Nthai what he meant by that. Nthai said that if he joined the side that wanted the mater settled, he would lose money. Although I was surprised at how straightforward Nthai was being about his personal interest in the matter, I was not expecting what he said next. Nthai said that if the Claimants paid ZAR 5 million into his foreign bank account, he would use his influence to get the Government to agree to settle the matter, with each party paying its own costs. He said that he had prepared a proposal for terms of settlement and if we agreed to pay him the money, he would get the proposal. He had with him notes of the terms of settlement ne was proposing.
7 12. Although I had only met Nthai once before and then only briefly, knew that he -was a senior member of the Government's legal team, that he did a lot of work for the DMR and that he was politically well connected. At the time, I knew that he was quite a senior member of the African National Congress (‘the ANC), but I did not know exactly what political appointments he had held. I did not know his exact role in the case. but it seemed from what he was telling me that he might be the main ‘go between' between the Government and FBD in Paris. 1 have since learned from research done by our lawyers and from what Mr Nthai subsequently told me that that he was:
· the DMR's principal outside counsel;
· appointed by President Thabo Mbeki as one of four Presidential nominees on the Judicial Service Commission, in 2005. Nthai served in this position until July 2009;
· elected as the Chair of the Pretoria Bar Council in 2007 and is currently the Vice-Chairman of the General Councii of the Bar;
· appointed by he Minister of Justice and Constitutional Development as co-chair of a ministerial committee enquiring into the liquidations sector in 2004;
· appointed by the Minister for Provincial and Local Government as the head of a task team on traditional leadership and governance in 2002;
· nominated, in 2002, as Public Protector by the Secretary-General of the ANC, former President and current Deputy President, Kgalema Motlanthe. Nthai later withdrew from the process after concerns were raised in the media about his political connections and various controversies around hi tenure as Minister of Safety and Security in the Northern Province, now Lirnpopo;
· appointed by the Minister for Provincial and Local Government as the deputy chair of the Ministerial Advisory Committee on Local Government Transformation in 200'!-2 (of which one of our legal counsel team, Peter Leon, was the chair);
· the Member of the Executive Council of the Northern Province for Safety and Security from April 1994 until June 1999;
· the Acting Premier of the Northern Province for periods in 1995, 1996, 1997 and 1995;
· head of the ANC's Legal and Constitutional Commission from 1990 to 1998;
713. I knew that this was a situation that could quickly become very complicated. I had in front of me a man who had definitely had the potential to make our lives very difficult. I did not know whether he was acting alone or with others. I felt I was treading on thin ice because if I rejected his ‘offer', I did not really know who I was rejecting. So at this meeting I did not want to confront or antagonize him, but at the same time wanted to protect myself as I did not know where this would end up and who might say what later. So, I began, without letting him know, to record the meeting on my mobile phone voice recording function.
7.14. What is very relevant about Nthai's comments at this meeting was that at least one senior member of The Government's team on this matter was definitely not focused on what the best outcome of the case would be for the Republic. It clearly showed that the Governments decisions about how to conduct this case were flawed as a result of the personal interests of at least one senior representative of the Respondent. What he said at the beginning of the recorded part of that conversation makes this clear:
Seth: That is the bottom line. I can help you terminate it and I lose money...
Seth: The most lucrative case I can ever have.
Mario: Really hey?
Seth: Of course. It is the most lucrative case I can ever have. mean, I can sit with this case for another five years, and I mean, I will make more money to retire
7.16. Nthai then said he would read me the proposal, which should take down and then I should tell him afterwards if this thing could get out the way I am proposing'. I took handwritten notes of the proposal, which he dictated to me from some notes that he had (a copy of my notes is attached as Annex MVM 8). The terms were to the effect that the Claimants would withdraw their claims against the Respondent, that each party would pay its own costs and that the Claimants would pay the "ICSID and administrative" costs. Nthai did not physically hand over any document to me. He said that if the Claimants proposed a settlement along these lines, and we paid him the money, he could use his influence to get the Government to accept the proposal. The voice recording function on my mobile phone was set to record to the phone's memory which has limited storage capacity), rather than to its memory card, so I only managed to record twenty or so minutes of the conversation before the memory of the device was full and it stopped recording. I did not arrive prepared to record anything, so I had trouble finding the settings on my phone and ended up recording onto the wrong memory and only recording part of our conversation.
7.16. I told Nthai that I was not authorized to make the decision that only the shareholders of Finstone and RED Graniti could make a decision on something like this. I said that I would have to discuss the matter with them and that I would get back to him. I said that, in any event, the terms were not really what the Claimants had in mind. I felt that the terms he had set out were too long and convoluted and that the Claimants should not have to pay ICSID's costs and the Tribunal's costs when the Government had ultimately given the Claimants what they asked for and were entitled to.
7.17. I wanted to tread very carefully in this situation did not want to make Nthai angry, I wanted to stay on good terms. Finstone and RED still want to do business in South Africa and I did not want to make an enemy of this man. During the first part of the meeting Nthai also told me that he was coming to Europe at the end of October 2009. I said that since he was in the region, he should come to Carrara in Italy to see Finstone and RED's facilities. I cannot recall whether I suggested this before or after he made the proposal. As I say below, it is not unusual for Finstone and RED to show people around their stockyards and other facilities, whether in ltaly, South Africa, or any other part of the world, as it gives people a sense of the scale of what we do. For example, when a large team from FBD visited South Africa in April 2008, they asked if they could visit our operations, and we agreed to show them around, even though our own lawyers were not going to be present. We were told by Shawn Donly after their visit that they said that they were surprised at how professional the operations were and that we were clearly serious investors with a long-term interest in the country.
7.18. I was at that time also negotiating terms for discontinuance with Shama, and Rocha had also said to me that he wanted to see the matter settled, so I did not want to do anything that might unsettle these negotiations at this point.
7.19. On Sunday 11 October 2009 I told Piero Foresti about Nthai's proposal. He said very clearly that the shareholders were not prepared to pay any amounts to Nthai. He said that they had been involved in this case for a long time and they wanted to see it through to the end in a completely correct and proper manner.
7.20. On Monday, 12 October 2009, Shawn Donly and I met with Livio Zucchini of RED Graniti and I told him about Nthai's "offer". Zucchini then discussed it with RED Graniti's managing director in Italy, Fabrizio Ponzanelli. On Tuesday, 13 October 2009 Livio Zucchini called me and said that RED Graniti was definitely not interested in this proposal. I spoke with Fabrizio Ponzanelli by telephone later that day and he confirmed this. I told both Piero Foresti, for Finstone's shareholders and Fabrizio Ponzaneili, for RED Graniti's, that the implications of turning Nthai down might be to make an enemy of him. They said that I should try to keep the peace with him, but that had to tell him that the deal he wanted was definitely not going to fly. Their main concern was for my personal wellbeing, given that I was the one based in South Africa and dealing with him and the rest of the Government, and they emphasized that should take steps to protect myself when dealing with him.
7.21. This is always the way we have done business in South Africa. Speaking for Finstone, there has never been anything even remotely like this since we invested in 1994. Everything was done above board. If the Claimants had been inclined to resolve issues in this way, then it would have made a lot more sense to do something like this much earlier without having gone through five years of sometimes quite intense legal fights arid arguments, especially with so much public attention on the case.
7.22. I called Nthai later that week. I did not tell him what the Claimants had decided, but suggested that we meet at my house, to which he agreed. Although all the Claimants had been clear and forceful in their refusal, I was the messenger who was going to have to turn him down, and I wanted to do it in a way that would have as few repercussions as possible, I felt at the time it would be better to do so in person as I was not sure how he was going to react.
The situation was a bit like defusing a bomb. When you have a delicate and possibly dangerous situation like this the last thing you do is hit it with a hammer. As shave said, I did not want to open old wounds with the DMR that were healing nicely. And 1 was worried that this thing could blow up in our races over and over again. I did not want in refusing Nthai to be seen as a declaration of war, as we were already in a battle that we wanted to resolve on as friendly terms as possible. The last thing I needed was to make an enemy of Nthai.
7.23. On one of my calls with Nthai after this, he told me again that he was going to be in Europe (he had mentioned this at the meeting of 10 October 2009 referred to in paragraph 7.17). Nthai said that his secretary had booked a flight and he was coming to Pisa. It seemed that he was intent on coming, I thought he might as well come and meet the shareholders and see the operations in Carrara, although I had yet to tell him that the shareholders had refused his proposal, something I wanted to do in person.
7.24. At this point, we had not informed our lawyers about the proposal Nthai had made. I also did not think it was necessary to disclose what Nthai had said to us to the Tribunal, as I felt that we were in a very strong position if we had to get a ruling from the Tribunal on costs. However, I wanted to protect myself in my further interactions with Nthai and to keep a record of our discussion. I recorded my meeting with him on an audio recording device. I was strongly inclined to treat this incident as Nthai having made a mistake. It was my preference to say no firmly, but keep the peace with him.
7.25. Nthai and I met at my home in Johannesburg on 18 October2009. After some general conversation, I told Nthai that "I spoke to the Italian shareholders, the two sets, and they were not very happy with the proposal... they said they are honest people, they see this as what the white people are always accused of doing. ..they are not willing you know, if the Government feels this is the right thing, great, but to have to compensate people separately no, really." I told him that the shareholders had said that "we do not feel we want a side deal. It is either a clean deal and the problem goes away or we are honest people, and you know, they have really been quite forceful both sets. As I told you I had to speak to them... And both of them very forceful, they say no. Then we prefer to go to court, spend the money, fight, but what is right is right and what is not right is not right." When Nthai asked ‘what is it you want to do? Do you want to continue?" I replied that the Claimants "would like to find a reasonable way out". I said that the shareholders were happy for me to continue to dicuss the matter with him, "but in a fair manner without having to ... go along with the deal you proposed'. I emphasized that the shareholders felt ‘very strongly that that they want to do this in a way that cannot be held against them". I explained to him that foreign investors were aIways accused of getting involved in this sort of thing in Africa and the Claimants did not want any part of it. Nthai said to me that he was "prepared to close this deal, but I mean you must know that lam losing income and that is the bottom line. If it goes ahead, well I still get my income."
7.26. Since Nthai had said earlier in the week that he had decided to come to Pisa (see paragraph 7.23 above). I suggested during our meeting that he still come to Italy and meet and speak with the shareholders. While the shareholders had clearly said no" to his proposal, I wanted to let him know that although it was a firm "no" from them, there was no harm done. I wanted to preserve the relationship with him. As I said to him I do not want the relationship between you and I or yourself and our company to sour.
We made arrangements for him to visit Carrara on 28 October 2009. I suggested that we meet again at my home on 20 October2009 to discuss the relevant arrangements. Later in our discussion., I again said that ‘whatever happens, I want this to be a business deal that we could not make, but we still remain, how can I say, happy with each other, in other words it is not like one did something wrong to the other. This is something that was on the table, for some reason we did not make it, but we remain honest to each other'
7.27. On 20 October 2009,we met again at my home. I explained to Nthai that "the situation is still the same as last time". Nthai continued on the line that he could influence the outcome of the case in our favour, but that it would cost him money to do so. He said that "I have to weigh between the two... If I do not take the decision, I mean, it works very much well for me". He said that he would make more than the ZAR 5 million if the proceedings continued. He explained to me how terrifically expensive the proceedings were for the Government. He said that he although he usually charged ZAR 25 000 a day, his fees were a bit higher for foreign cases. He said that the Governments external lawyers FBD were also doing remarkably well out of the case. He said that "those guys in Paris I mean, they are making a fortune. ...out of this case. I mean they are talking about €250 000 at a go, and so, they are making a killing out of it." I said to Nthai that I still wanted to be able to have a constructive relationship with him. I thought, perhaps wrongly with hindsight, that it would be better for Nthai to hear it from the Claimants directly, who had the final say, and for him to meet them so that there was no bad blood arid things could continue.
7.28. However, when I told the Claimants that Nthai was making a detour to fly to Pisa on his European trip they said that they did not want to meet with him. Both my father-in-law Piero Foresti for Finstone and Fabrizio Porizanelli for RED Graniti reiterated that they did not want to meet with Nthai. They said that they had already turned him down on his proposal, so they didn't see any point in meeting with him.
7.29. Nthai arrived in Pisa late on the evening of October 28 and I collected him from the airport and drove him to the hotel he was staying at. He was flying out again at 6am the following morning so he hardly spent any time in Italy. Given the short time he was there, I did not have to explain to him that the Claimants had refused to see him. I had dinner with him that night and tried to keep the relationship with him on a even keel.
I explained again that although the Claimants were not going to get involved in any "side deals" there might be opportunities to work together in the future, At this point, my feeling remained that we should just leave situation and riot raise the matter before the Tribunal. The following morning I collected Mr Nthai very early from his hotel and drove him to Pisa Airport. I still find it very puzzling that Nthai came all the way to Carrarra but was there for only nine hours. Even f the shareholders had not declined to meet him, he would not have gotten the chance to see them in any event because he arrived so late and left so early.
7.30. I stayed in touch with Nthai after this. We had still not told our legal team of the nature of the discussions with Nthai. As I said above at 7.9 Shawn Donly had told them that I would be meeting Seth Nthai, but they were told we were meeting socially. At around this time, at the end of October 2009, I was also in touch with Sharma regarding the discontinuance proposals I have discussed above at paragraph 5.5. 1 mentioned to that Sharma had recommended that we send the Trade and Industry and Mineral Resources Ministers a proposal for discontinuance.
I sent a draft of this letter to Nthai by e-mail on Saturday 31 October 2009 (as well as to Sharma, which I discuss in paragraph 5.5.7 above. Nthai said that he thought the letter should probably be sent to FBD as well. He also suggested that we added a sentence stating that the Claimants were prepared to state in the settlement agreement that the MPRDA arid the Mining Charter did not violate international law.
7.31. Shawn Dony told me that he informed Webber Wentzel that I had discussed this letter with Seth Nthai or. 31 October 2009, but nothing had yet been said to them about Nthai's ZAR 5 million proposal, because at that time I was still inclined not to expose him.
7.32. The fact that Nthai knew about this letter to the Ministers and saw a draft of it before it was sent is quite relevant. Soon after we sent the letter to the Ministers on the afternoon of Saturday 31 October 2009, our lawyers sent a copy of the letter to FBD by e-mail. My lawyers tell me that at about mid-day on Tuesday 2 November 2009 (the Request for Discontinuance was filed later that day), FBD sent a letter to them, which stated that the Republic takes exception to the irregular, and improper, manner and timing of the correspondence from you and your clients or, Saturday, 31 October 2009'. The letter said that seeking to bypass counsel for the Republic was improper" Webber Wentzel forwarded this letter to Shawn Donly, who discussed it with me. What is unusual about this letter is that, according to our lawyers who have gone through all of the correspondence, this was the only letter n this matter sent by FBD to Webber Wentzel that is co-signed by Seth Nthai (with an electronic signature).
7.33. This letter from FBD caused a lot of unhappiness among the Claimants when they received a copy from Webber Wentzel. First, what it said was not true Seth Nthai was a senior member of the Government's legal team and he had seen the letter so he could not have been "bypassed." Second, and a cause of considerable animosity towards Nthai, was the fact that his electronic signature appeared on this letter for the first time, even though it had not appeared on any letters from FBD before this. They were very upset. The Claimants felt that Nthai was trying to send them a message, to say that if they did not change their minds and pay him the money, he was close enough to the process to make life very difficult for them and ensure that there was no settlement. As a result of this they decided to tell Webber Wentzel that afternoon about Nthai's offer. I am told by Shawn Donly that he told Jonathan Veeran about Nthai's actions at a meeting hed at Webber Wentzel's offices that afternoon, which Peter Leon and Toby Landau QC joined on a secure line.
734. Shawn Donly provideed Mr Veeran with the audio recordings of 18 and 20 October 2009 that afternoon Webber Wentzel then arranged for the transcription of the recordings. These were circulated to our legal team or, the afternoon of 4 November 2009.
7.35. Although our lawyers' advice was to tell the Tribunal and the Government about this soon after filing the Request for Discontinuance, I was very reluctant to do this for the reasons I have explained. In the Request for Discontinuance, alt that was added referring to Nthai was a reference to another senior representative of the Respondent to indicate that it was not only Sharma that I had been speaking to about the matter.
7.36. By this time, the situation was becoming very complicated and there were different views as to what we should do among the Claimants and the legal team, and myself. The legal team advised us that we should disclose this information as soon as possible to FBD and the Tribunal while I still felt that it would be better not to disclose this information about Seth Nthai and just focus on the discontinuance. Things in South Africa are complicated - you need to be mindful of the political environment in which you are operating. From a safe distance it is easy to say that we should have immediately informed FBD and the Tribunal about the Nthai situation, but I felt that this was going to be a bit hazardous and personally I was not too keen to go that way. For this reason, I stayed n touch with Nthai for the next few days and had a number of telephone calls with him. I carried on recording some of these interactions with Nthai in order to protect myself against any allegations that I had been at fault in any way: I informed Donly that I was still in contact with Seth Nthai. Donly told me that he had also indicated to Webber Wentzel that I was still in touch with Nthai.
7.37. Shortly after9 pm on the evening of 2 November 2009, I called Nthai to discuss FBD's letter of 2 November 2009. I recorded this call as well. On the call, Nthai came across as quite defensive. He explained that there were a lot of discussions going on within the Government about the settlement proposal and Sharma did not have the upper hand in these discussions. He said that "we are all aware, by. the way, even within the DTI, we are all aware that Iqbal Sharma is talking to you". He recommended that we respond to FBD's letter by pointing out that we had been speaking to Sharma and that Sharma had advised us to write directly to the Ministers. Nthai warned us against responding "in such a way that then you find the discussions cannot go on". He said that Sharma was still "playing a positive role" and I should "keep in touch with him". He said that I should not mention to anyone that I was speaking to him. Then he advised me what the Governments next steps would be. He said that "the next thing that we are going to do is send you our only proposals for settlement. Then the discussions will start from there". I replied that that if we received a proposal in which we were asked to pav huge costs, this would not be acceptable to the Claimants. Mr Nthai said that "at that stage it will be a question of discussions".
7.38. My lawyers tell me that the Request for Discontinuance was filed later that day on 2 November 2009, Nthai contacted me the next day, 3 November 2009.22 He was a bit agitated about the Request. He wanted to know who the "senior representative of the Respondent" was that was referred to in the Claimants' Request. I said that I had not seen the final draft of the Request. I said I was sure that he had not been named in it. Nthai made it clear that he did not want me to disclose his "offer" to our lawyers. I informed Shawn Donly, who tells me that he advised Webber Wentzel, that I was still speaking with Nthai. I knew that Donly had told Webber Wentzel about Nthai's "offer" the day before, but I did not want Nthai to know this. As said before, I did not want to make an enemy of Nthai and I still did not think we needed to disclose what he had said to us to FBD and the Tribunal. I maintained the view throughout that we should not disclose this in the arbitration, but ultimately I was overruled by the Claimants who decided, on the repeated advice of our external counsel, to give cur lead counsel Toby Landau QC permission to inform FBD about Nthai's conduct. This was done on 8 December 2009.
7.39. Later on 3 November 2009, I called Nthai again after getting a message from him. He said that the Government was now working on a proposal for settlement and an agreement on discontinuance. I had to again explain to Nthai that "we [i.e. the Claimants] had to turn down the offer". However, I did say that "there is plenty that we can do together in the future, so that we can look forward to a working relationship in a positive manner." I was not trying to get Nthai to engage in any improper or unprofessional conduct in the proceedings, but I did want to remind him that the Claimants were dead against any unlawful payments.
7.40. On 4 November 2009 I called Nthai again and asked why he had co-signed FBD's letter of 2 November 2009, even though he had seen the letter and even given me comments on it. Nthai's answer was that because he was a ‘lawyer of record' for the Government, all letters from FBD on this case had to have his name, I said that not only his name, but also his signature was on the letter. Nthai said that all the correspondence to the Tribunal had to include his name, and would include his electronic signature.
He said that this was just a matter of formal process. Nthai's explanation does not seem to stack up because, as I mentioned above in paragraph 6.33, this was the only letter that had Nthai's name or it. I told him that RED Graniti was very angry about the fact that his signature was on the letter.
7.41. On this call, Nthai and I also discussed the Claimants Request for Discontinuance of 2 November 2009 He was worried about a reference to a "senior representative of the Respondent". I had to confirm that this referred to him. I explained RED Graniti wanted it in because they were angry that he had signed the letter. Nthai was concerned about this. He told me that FBD thought that this was a reference to someone within the DTI. Nthai said that there could not be any more references to him.
7.42. On 4 November 2009, I received a call from Maurizio Mariano. He said that Seth Nthai had contacted him and asked me to call him. I called Nthai, who was quite agitated about Webber Wentzel's 4 November 2009 response to FBD's letter of 2 November 2009. He said that the letter was the same as the Request for Discontinuance and mentioned "another senior representative of the Respondent". Nthai said that "everybody [in the Government) wants to know who is this other person". Nthai told me that "I cannot from the ethical point of view have ever discussed this thing with you". I explained that the references were to him, though he was not named. I said that RED Graniti had insisted on referring to him in the letter. Nthai said that all of our future communications must not be disclosed to anyone. Nthai added that he was now placed in a difficult situation and "would have to find ways of protecting myself, because I am not going to get drowned". After this meeting, I had one further meeting with Nthai at his house, before his actions were disclosed to FBD, in which he continued to request payments In exchange for facilitating the settlement of the matter.
7.43. Following my interactions with Nthai, Nthai apparently contacted one of Kelgran's BEE partners, Phuti Phukubje, and indicated that Kelgran's ultimate shareholders might face difficulties if the case was not settled, and that this might have an effect on Phukubje's investments with Kelgran. Phukubje called me by telephone and said that Nthai had contacted him and said that he wanted to meet with him. When he met with Nthai, Nthai had told Phukubje that he should "take care' regarding his dealings with Kelgran because there might be trouble ahead for their ultimate shareholders if they did not resolve their issues with the South African Government." I believe this may have been a veiled threat by Nthai to the Claimants that, as I feared, he might try to make life difficult for them. having turned down his offer and after FBD had been lnformed.
Mario Vittorio Marcenaro
Date: 25 January 2010
(Transcribed from the PDF. As such there may be small errors in the text.)
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