Between them they took over and ran into the ground the Aurora mines. For eighteen months their workers were not paid. Some went bankrupt and were driven to suicide.
Yet these ‘politically connected’ men appeared to be able to walk away from the company they had allegedly asset stripped scot-free.
Khulubuse Zuma gave the ANC Rand 1 million donation towards their election expenses at the height of the controversy, despite protests from the union.
It was a story I covered back in 2011 for the BBC. Now, at last, the liquidators appear to be catching up with them.
Source: Sunday Independent
August 24 2014 at 08:00am
By LOYISO SIDIMBA
Johannesburg – The liquidators of Aurora, the mining company part-owned by President Jacob Zuma’s nephew Khulubuse Zuma, together with Nelson Mandela’s grandson Zondwa Mandela, are threatening to proceed with their multibillion-rand lawsuit without the company’s owners.
Tomorrow the joint liquidators – Johan Engelbrecht, Deon Botha, Allan Pellow and Barend Petersen – return to the North Gauteng High Court, where they are asking for Zuma, Mandela and their fellow Aurora directors Thulani Ngubane, Sulliman ‘Solly’ and Fazel Bhana declared liable for fraudulent conduct in the running of the company.
Zondwa Mandela was Aurora’s managing director.
The liquidators’ lawyer John Walker said the Aurora bosses have indicated that they will apply for the matter to be postponed.
“The liquidators will oppose the postponement and will ask the judge to proceed,” Walker said.
He warned that they would ask Judge Eberhard Bertelsmann to proceed even in the absence of the Aurora bosses.
Khulubuse Zuma’s lawyer Eddie Claasen, and David Swartz who represents the other Aurora directors, were not available for comment this week, but Swartz has written to Walker, saying the liquidators’ application cannot realistically be heard this week because they still need to prepare and submit their responding papers.
In his affidavit, Engelbrecht accuses Zuma, Mandela, Ngubane and the Bhanas of making misrepresentations to the liquidators and knowingly being party to the running of the company in a reckless and fraudulent manner.
The liquidators have instituted a R1.7 billion claim against Aurora’s insolvent estate.
Aurora and its bosses also face a probe into the disappearance of R120 million in proceeds of gold sales, which according to Engelbrecht, remain unaccounted for.
The liquidators have promised to conduct a forensic investigation into the loss of the R120m income from gold sales.
In March last year, chairman of the Master of the North Gauteng High Court’s inquiry into Aurora, Wayne Gibbs, indicated that they had filed a lawsuit against the Aurora directors for the looting, with particulars of the claim already drafted. The trial has been set down for next year.
According to Engelbrecht’s affidavit, the Bhanas controlled Aurora’s finances.
Engelbrecht says the Bhanas managed Aurora’s affairs recklessly, making misrepresentations about the company’s financial capabilities by hiding the fact that some of its creditors were their family members. Aurora was factually insolvent from the start.
Engelbrecht also accuses Zuma, Mandela and Ngubane of conducting Aurora’s affairs recklessly by misrepresenting the company’s financial capabilities to liquidators with the intention to defraud them.
According to court documents, Aurora inherited 5 300 employees when it bought two gold mines in Grootvlei, Ekurhuleni and Orkney in North West.
The Master’s inquiry into Aurora’s mismanagement of the mines heard that the trade union Solidarity received up to a dozen letters from Mandela, Ngubane or President Jacob Zuma’s lawyer Michael Hulley promising to pay workers’ salaries but that they reneged on every agreement.
Hulley, as an attorney, advised the president’s nephew on Aurora’s affairs and was asked to become more involved.
Khulubuse Zuma also asked Hulley to assist him and the Aurora board in addressing the issues that confronted the company at the time.
At the inquiry, Zuma said Hulley was never appointed as an Aurora director.
However, the Master’s inquiry heard that Hulley’s law firm, Hulley and Associates, his attorney, a Mr Latib, and a company called RAE Associates were paid R15.7m.
Aurora acquired the Orkney and Grootvlei mines for R215m and R390m respectively.
When Aurora bought the mines it had no funding and had raised no actual capital to utilise for the acquisition and operation of the mines.
The company had been promised US$200m (about R1.4bn) by AM Capital in exchange for a 50 percent stake in Aurora. It was also depending on a Malaysian funder, who had promised R350m for the Grootvlei operations.
The company was liquidated in October 2011 after the previous owner of its mines, Pamodzi, proved claims in Aurora’s insolvent estate to the value of R122m and R1.7bn.
Aurora also owed Eskom more than R54m and security companies Chubb, Coin, Springbok Patrols, and mining contractor Copper Eagle applied for its liquidation after its failure to pay them their millions.