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CityPress - - Business - SU­SAN COM­RIE su­san.com­rie@city­press.co.za

hen Aurora Em­pow­er­ment Sys­tems was cre­ated in 2009, Khu­lubuse Zuma pre­dicted that within a few years the com­pany would be worth be­tween $5 bil­lion and $10 bil­lion. But on Thurs­day, the North Gaut­eng High Court ruled that Zuma and his co-di­rec­tors, Zondwa Man­dela and Thu­lani Ngubane, should be held li­able for Aurora’s debts, which are es­ti­mated at R1.7 bil­lion.

In a damn­ing judg­ment, Judge Eber­hard Ber­tels­mann crit­i­cised the Aurora di­rec­tors and their fi­nan­cial ad­vis­ers for their takeover of the Grootvlei and Orkney gold mines – a reck­less gam­ble that cost 5 300 work­ers their jobs and caused un­told en­vi­ron­men­tal and eco­nomic de­struc­tion.

“The re­spon­dents must have known from the first mo­ment that they would wreak havoc in the min­ers’ lives through their ac­tions, yet they pressed ahead,” Ber­tels­mann said.

He said the prom­ises Aurora made to the liq­uida­tors were “a fig­ment of an over­ac­tive imag­i­na­tion”.

“The en­tire pro­ject was and re­mained a pipe dream – with dis­as­trous con­se­quences for many in­di­vid­u­als,” he said.

Zuma is a nephew of Pres­i­dent Ja­cob Zuma and Man­dela is a grand­son of for­mer pres­i­dent Nel­son Man­dela, and Ber­tels­mann noted that they boasted about their po­lit­i­cal con­nec­tions.

The public sham­ing from Ber­tels­mann has done noth­ing to de­ter the di­rec­tors. On Fri­day, Zuma’s spokesper­son, Vuyo Mkhize, con­firmed that he would ap­peal the judg­ment.

The rul­ing fol­lows an ap­pli­ca­tion by the joint pro­vi­sional liq­uida­tors of Pamodzi in terms of the old and new com­pa­nies acts, sec­tions that al­low di­rec­tors and con­trollers to be held per­son­ally li­able for the debts of a com­pany.

Man­dela, Ngubane and Aurora’s fi­nan­cial ad­vis­ers, Solly and Fazel Bhana, were found guilty of “wil­ful de­cep­tion” and “reck­less man­age­ment of Aurora’s af­fairs” – and will now be held per­son­ally li­able for the debts.

Zuma claimed that he was kept in the dark about prob­lems at the com­pany, say­ing: “The media told me ev­ery­thing that was go­ing on in my com­pany … I would de­mand [an­swers] … and I would be told the sto­ries.”

De­spite his claim of ig­no­rance, Ber­tels­mann still found that Zuma should be held fi­nan­cially li­able, say­ing: “If he re­ally did not know, it is be­cause he de­lib­er­ately chose not to be in­formed.”

There was no sign of the di­rec­tors or the Bhanas in court on Thurs­day morn­ing, although a hand­ful of the 5 300 mine work­ers who lost their jobs gath­ered out­side the court.

“We’re very happy for the work­ers’ sake,” said Gideon du Plessis from trade union Sol­i­dar­ity. “The judg­ment proved that we were deal­ing with peo­ple with strong po­lit­i­cal con­nec­tions and who en­joy po­lit­i­cal pro­tec­tion, and they’ve fi­nally re­alised that they are not un­touch­able.”

On Fri­day, Zuma con­firmed through Mkhize that he had al­ready de­cided to seek leave to ap­peal the judg­ment.

Zuma’s lawyers in­tend to chal­lenge the find­ing that he failed to act, point­ing out that he in­vested R35 mil­lion of his own money into the mine in an at­tempt to res­cue it.

At­tor­ney Eti­enne van der Merwe, who rep­re­sents Man­dela, Ngubane and the Bhanas, said he would be meet­ing with his clients this week to de­cide whether they would also ap­peal.

For work­ers who are hop­ing that the judg­ment will trans­late into cash in hand, this means fur­ther de­lays.

“Ob­vi­ously the ex­pec­ta­tions [of work­ers] will be very high that there will be rev­enue com­ing their way very soon, but that is not the case,” Du Plessis con­ceded.

“But it is the first vic­tory that we’ve ex­pe­ri­enced in five years.”

He said most work­ers were owed be­tween two and nine months’ salary, but the most they would be guar­an­teed was R28 000.

Although the judg­ment means that the di­rec­tors and their ad­vis­ers will have to pay up, the ex­act amount they’re li­able for still needs to be de­ter­mined.

And from there, the hunt for funds can be­gin, which could in­clude delv­ing into the di­rec­tors’ and the Bhanas’ bank records, trusts and off­shore com­pa­nies.

It’s un­likely that this will be an easy process. Dur­ing the liq­ui­da­tion in­quiry, fi­nan­cial ad­viser Solly Bhana claimed that, de­spite own­ing nu­mer­ous race­horses, he did not have a bank ac­count and re­ceived all his pay­ments in cash.

Like­wise, his son, Fazel Bhana, who was con­sid­ered by most peo­ple to be the de facto boss of Aurora, told the in­quiry that there was no pa­per­work for loan agree­ments run­ning into mil­lions of rands.

“Your fa­ther would know from the old school if you give your word, your word was good enough to raise money...” Fazel told the in­quiry.

Zuma is an ac­tive di­rec­tor of 27 dif­fer­ent com­pa­nies in South Africa, and also holds lu­cra­tive stakes in oil con­ces­sions in the Demo­cratic Re­pub­lic of Congo through two off­shore com­pa­nies reg­is­tered in the Bri­tish Vir­gin Is­lands. Although Zuma has re­fused to dis­close the size of his stake in these con­ces­sions, Mkhize con­firmed that the to­tal value of the blocks, over their life­time and if they are de­vel­oped to pro­duc­tion, could be in the re­gion of R100 bil­lion.

“Zuma is fully aware of the im­pli­ca­tions of se­ques­tra­tion: the re­quire­ment for him to dis­close all of his fi­nan­cial ac­tiv­i­ties for the past and the present; and the re­al­ity that his man­age­ment of his af­fairs would pass on to a trustee who would dic­tate ev­ery­thing about his life in the fi­nan­cial sense, from which house he stays in, what car he drives and where he works for what­ever rea­sons,” Mkhize said.

“He un­der­stands, for in­stance, that if you are se­ques­trated and you are un­em­ployed, the trustee can elect to di­rect or to find any em­ploy­ment for him. Be­cause of that … he is pre­pared to do all in his power to en­sure that an out­come, which he be­lieves will be the only out­come which is fair and just, ma­te­ri­alises.”

This, Mkhize said, would be for Zuma to be ex­cused from any per­sonal li­a­bil­ity for Aurora’s debts.

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