Dirlem struggles to hold on to its shares in Lanxess mine

DIRLEM, the empowerment partner of Lanxess Chrome Mine (LCM), a subsidiary of German-owned speciality chemicals group Lanxess, is battling to hold on to its shares amid a major dispute that has threatened its stake.

The dispute turned ugly with Dirlem approaching the Johannesburg High Court, which granted it an interdict preventing the chrome producer from taking over its 26 percent for

close to nothing.

LCM moved to forcefully buy the stake after Dirlem allegedly breached a shareholder’s agreement between the parties.

Dirlem director Kenneth Setzin said yesterday that the relationship with the company disintegrated after a black economic empowerment (BEE) verification agency interview in which he raised his concerns about the company’s corporate governance.

“Things came to a head after the BEE verification interview,” he said,

adding that the company accused Dirlem of breaching the shareholder agreement following the interview.

Lanxess spokesperson Nomzamo Khanyile yesterday admitted that its relationship with Dirlem had broken down completely over the past two years.

“In order to protect the business of LCM, Lanxess as the majority shareholder has initiated the remedies which the Shareholders’ Agreement provides for in the event of a breach of its terms, which is a Forced Sale of Dirlem’s

shares in LCM,” Khanyile said.

Khanyile also said LCM’s empowerment shareholding was in full accordance with the applicable Mining Charter and would continue to be in any future shareholder constellation.

Setzin blamed the company for excluding minority shareholders from decisions which included its contract with state-owned freight rail company Transnet.

“As a board member, I observed a total disregard for us as a minority shareholder. We need the same access

to information as majority shareholders. We should be part of all decision-making and not rubber-stamp decisions,” he said.

Dirlem had approached the BEE Commission, which addresses fronting for an investigation, and the Department of Mineral Resources to weigh in on the fight. It also lodged a complaint against auditing firm PricewaterhouseCoopers (PwC) with the Independent Regulatory Board for Auditors for being complicit despite its concerns about the company.