He has sandy brown hair and rugged good looks. He is a former motor rallying champion. He owns farms, hunting lodges, a corporate jet, a helicopter and has a yacht moored off the Mozambique coast.
Conrad Muller Rautenbach — Billy to his friends — would appear the ideal man to have as a substantial shareholder in one of Britain’s fastest-growing companies. But his name is conspicuous by its absence from the literature of Central African Mining and Exploration Company (Camec).
Chaired by the former England cricketer Phil Edmonds, Camec is one of the stock-market phenomena of the year and darling of the Alternative Investment Market (AIM), the lightly regulated junior part of the London Stock Exchange.
Rautenbach has played a key role in the company’s development. Last year he was instrumental in a deal that secured lucrative rights for Camec in the Congo, and in return he was handed 17% of the company.
The reason for Camec’s disinclination to shout his name from the rooftops might be his colourful past. Rautenbach is a fugitive from the South African authorities, having been accused of fraud, theft and corruption in his running of the country’s Hyundai car dealerships in the 1990s. Among other allegations — all of which he strenuously denies — he is said to have stolen 1,300 vehicles.
For Hugo de Salis of St Brides Media and Finance Ltd, Camec’s PR representatives, the omission of Rautenbach from its sales bumph is somehow laughable.
“I think it was something about car production,” he chuckled. “I’m not au fait with it really but the lawyers have all been consulted and they say it’s a load of rubbish. He’s innocent until proven guilty, that’s the thing. I don’t know what the story is, to be honest. I mean, why don’t people focus on this as an investment opportunity?” Camec shares have risen more than 700% in the past year, drawing in blue-chip investors eager to cash in on the boom in mining stocks. Its popularity is not difficult to explain. The team of entrepreneurs led by Lusaka-born Edmonds and his partner Andrew Groves has a history of bringing African resources firms to market and seeing their share prices soar — notably White Nile, which had the audacity to strike oil deals with rebel leaders in southern Sudan before they became part of a new administration.
Camec is even more exciting, offering the rare prospect of rich reserves of cobalt and copper from the Democratic Republic of Congo (DRC), a mineral-rich country recovering from a debilitating five-year civil war.
The promise of access to copper, in particular, has got the City’s blood pumping; the metal’s price has shot through the roof to more than $8,000 a tonne, triple what it was a year ago. Camec has kept in step. Its shares closed on Friday at 83¾p, giving it a stock-market value of £837m.
Recently Camec announced plans to raise another £100m by selling new shares to City institutions, saying it would use the money to “implement its aggressive growth strategy, which it believes will rapidly develop shareholder value and secure a position as being a primary investor in Africa”.
The revelation of Rautenbach’s past will add another chapter to the colourful story of Edmonds, who has made millions by being prepared to pursue contacts and contracts in parts of the world where others fear to tread. But it may also give investors cause to examine their involvement with the company and give ammunition to those calling for greater regulation and disclosure for companies traded on AIM.
As yet there has been no sensible analyis made of Camec and its prospects in the DRC. Repeated calls to metals and mining experts across the City revealed only that the company is basically an unknown quantity, riding the cobalt bubble born on demand in the battery and aircraft engine industries, among others. Nobody wanted to be quoted directly, yet the investors pour in.
“All the big mining companies are going in [to the Congo],” said a Camec investor. “It’s the last big place where the resources haven’t been locked down. Everything is going to be a $1 billion company. There’s a UN peace process and now is the time to jump in — it’s a question of who you jump in with.”
IN his classic Africa novel Heart of Darkness — the inspiration for the movie Apocalypse Now — Joseph Conrad transported the reader on a journey up the Congo river, a metaphorical odyssey into the darkest reaches of the human soul. Conrad was writing in the 1890s, but today’s so-called Democratic Republic of Congo is as menacing and unfathomable: scene of a war in which at least 3m have died yet a land of untold riches for those with the right connections.
Rautenbach, an engineer, is an acknowledged expert in doing deals in countries in turmoil. His trucking business, Wheels of Africa, is widely seen as one of the best on the continent.
Since fleeing South Africa in 2000, he has lived in Zimbabwe, where his friends include the speaker of the house, Emmerson Mnangagwa, a power in the land thanks to his background of running the secret police.
It was Mnangagwa who helped inveigle Rautenbach with Laurent Kabila, who was president of the DRC at the time. Rautenbach took over the state mining company, Gecamines, trimming down the workforce from 22,000 to 12,000, and making it profitable again. But Kabila, who began to behave almost as irrationally as his infamous predecessor, Mobutu Sese Seko, claimed Rautenbach was smuggling cobalt out of the country.
He was expelled, and Kabila allowed John Bredenkamp, a tobacco trader and rival of Rautenbach’s, to take over his concessions and assets.
James Tidmarsh, a lawyer who represented Rautenbach against the DRC government, fell out with his client and ended up suing him in the British Virgin Islands.
In a court affidavit, Tidmarsh described Rautenbach as “a difficult and intimidating character. He frequently loses his temper and when he is unhappy liberally shouts at employees, staff and even customers ... Due to his racist views, he is particularly unpleasant to blacks and Indians. He can be equally unpleasant and overbearing to whites, although less condescending.”
The political landscape changed when Kabila was assassinated in January 2001. Rautenbach was suddenly back in favour with the inner circle of Kabila’s son, Joseph, the new president, and Bredenkamp’s assets were partly transferred to him. Bredenkamp, who had invested £10m, claims he was never compensated.
IN February this year, Camec joined what has become Africa’s Klondike. Rautenbach was paid $80m — $25m in cash plus 171m shares — for 75% of Congo Resources Joint Venture, a cobalt-marketing outfit in Katanga province, the heart of the minerals boom.
Rautenbach has a history of falling out with business partners. His latest spat is with staff at Camec’s former South African unit, Camec SA, many of whom claim to have been unceremoniously fired as part of the deal with Edmonds and Groves.
Several mining executives were flown to the Kambove processing plant aboard Rautenbach’s plane, where they found themselves allegedly deprived of their passports and subjected to what one executive described as “a kangaroo court”.
“They were accused of cost overruns and threatened with imprisonment,” said a lawyer preparing to represent the men in South Africa next week.
Rautenbach’s supporters — and Camec — say he is the victim of a smear campaign organised by Bredenkamp.
“I’ve met Rautenbach and I know what sort of chap he is,” said one analyst who backs Camec. “He’s very good at putting parts of old mining machinery together and this is what brought him to the attention of Laurent Kabila. He showed Kabila he could make money out of Gecamines. The truth is he is the best operator in the Congo, and all the big companies know it.”
The same analyst said the South African case against Rautenbach was weak and that the only reason he did not risk travelling to the country was that he would not be granted bail.
Last week the National Prosecuting Authority of South Africa confirmed it was still chasing Rautenbach. “The international arrest warrant for Mr Rautenbach still stands and we’re working on an extradition order from Zimbabwe,” said Willie Hofmeyr, the authority’s deputy national director. “We initially managed to have a restraining order on his assets and we’ve won that again. If he has something in the UK we would like to work on it. There is co-operation with the UK authorities.”
Rautenbach successfully appealed against the seizure of his assets, most of which he quickly moved out of South Africa before the authority overturned his appeal. It has since managed to grab what it can — including several farms in KwaZulu-Natal and the Western Cape, valued at about 60m rand (£5m). “It’s a drop in the ocean,” admitted the Johannesburg asset forfeiture unit.
Thankfully for Edmonds and Groves, the arrest of their partner is unlikely any time soon. As another source in the National Prosecuting Authority admitted: “Rautenbach kind of owns the Zimbabwean cabinet and we’re not very hopeful.
“The negotiations are very delicate and frankly we don’t want that much written about it because it might put a spike in our chances of getting an extradition,” he said.
For its part, Camec said last night: “The company’s directors and lawyers are satisfied with the due-diligence process carried out during the deal. Subsequently, the company has been receiving revenue from its 75%-owned joint-venture operation, which reported in April a monthly turnover of $11.5m.
“The relationship with Mr Rautenbach is excellent and as a major shareholder he is committed to the advancement of Camec’s operations in the Congo, as well as all other Camec activities.”
Scandal and failure rock market
WHEN the Alternative Investment Market (AIM), now the home of Camec, was created in 1995, only 10 companies were quoted on it, writes Richard Fletcher.
Nearly 11 years later the market is home to more than 1,500 small or fast-growing companies. The largest — Sportingbet — is worth £1.9 billion.
The success of AIM has attracted companies from all over the world to list their shares in London, including firms from Israel, the United States, South Africa and India.
After years as the main market’s ‘little brother’, AIM is growing up. The question is whether the junior market is developing into a disruptive teenager.
A series of high-profile company failures and scandals has rocked confidence in the market. They include Langbar, the AIM cash shell at the centre of a £365m fraud investigation, and Regal Petroleum, the former stock-market star that has cost investors hundreds of millions of pounds after its share price collapsed when its wells were found to contain little oil.
The key to AIM’s success has been finding the right balance of regulation — light enough to attract fast- growing smaller companies but strong enough to protect investors. American companies are now looking to AIM because of the regulatory cost of listing on Nasdaq.
Martin Graham, head of AIM, insists that the market has got the balance about right. ‘AIM has come of age,’ he said. ‘It has become a mainstream asset class.
The biggest challenge now is managing the growth.’
