How Aurora stripped mines
Orders given to deliver boxes of cash raise new questions
SENSATIONAL new documents claim that controversial scrap-metal company New Reclamation Group struck a deal with the Bhana family to secretly strip Aurora’s Grootvlei mine of working equipment.
These claims emerge from an affidavit given by Neil Davies, one of the group’s former employees, to a liquidation inquiry convened to determine exactly how the Grootvlei and Orkney mines collapsed in 2010 and left 5 300 mineworkers high and dry.
Aurora’s directors were Nelson Mandela’s grandson Zondwa Mandela, President Jacob Zuma’s nephew Khulubuse Zuma, and Thulani Ngubane, while the company was backed by father and son Solly and Fazel Bhana.
It is a case study of a failed mining deal. Aurora took over the failed Grootvlei and Orkney mines in July 2009, ostensibly to save the mines. Instead, Aurora never paid for the mines, and now stands accused of systematically stripping the mines and using that money to line the pockets of Aurora directors.
Davies’ affidavit details how the Bhanas did a deal with New Reclamation’s Harry Kassel, son of chairman David Kassel, to strip the mines of working equipment, under the guise of it being scrap.
This appears to contradict the deal struck in 2009 by the liquidators of the mines and Aurora, which said Aurora was “not permitted to remove or dispose of any of the assets belonging to the mines” without the consent of the liquidators.
Davies said in his statement: “During September 2010, Harry Kassel approached me and advised me that he had done a deal with Solly Bhana of Aurora and that New Reclamation was going to be getting a lot of scrap for the [Newrec] Stilfontein and Dunswart branches.”
Aurora was going to be paid in cash and the group had to make sure nothing went wrong.
Davies said he was then ordered to stuff cardboard boxes full of cash, and deliver it to members of the Bhana family and Mandela. “I received a call from Kassel in September 2010, advising me that he needed R950 000 in cash urgently and I needed to put the money together quickly . . . I was to take the money home with me because [Aurora security head at the time] Brad Wood would come to my house to pick it up,” he said.
A day later, Kassel allegedly asked for another R450 000 and Davies was told to take that money directly to either Solly Bhana or Kassel. Davies was also allegedly told to pay R285 000 to Hulley & Associates, the law firm belonging to President Jacob Zuma’s former lawyer Michael Hulley.
In another instance, it was alleged that New Reclamation staff were told to take R150 000 in cash to the Bhanas’ house in Houghton, Johannesburg — money which was then allegedly handed to Mandela.
Invoices seen by Business Times confirm that large amounts of cash were paid by New Reclamation Group to Aurora — a total of R3.7million.
In another instance, Davies said that Kassel instructed him and a colleague to “immediately move the winder ropes from [New Reclamation’s offices in] Stilfontein to our Rustenburg operation, and cover and hide them in case anyone came looking.”
One of those winder ropes, which was taken from the mine, was resold for R1-million.
People close to the case warn that Davies’ claims should be treated with caution, because he was arrested last year for his role in a copper metal syndicate, and had previously been accused of fraud by the group — the company he is now implicating.
Lawyer Ian Small-Smith, representing Harry Kassel, said Davies was simply trying to smear the group: “Davies is out on bail on two cases of fraud and one of theft. He has stolen millions from Reclam and has recently been arrested for stealing copper cables from City of Johannesburg.”
Contacted on Thursday, Davies said: “I am not the only one making these statements.
“If it was a smear campaign or something, why would other people also make statements against New Reclamation? There are also other people . . . who knew what was going on. And there is video footage of them stripping the assets on that mine,” he said.
Davies’ claims of asset-stripping also tally with numerous other accounts.
Last week, liquidators of the mines dragged the Aurora directors, including Zuma, to the North Gauteng High Court in a bid to hold them personally liable for R1.5-billion on the basis that they acted recklessly.
Those court papers say more than R1.5-billion was lost due to fraud, non-payment of workers and other issues — while R122-million in physical gold went “missing” during Aurora’s tragic reign at the Grootvlei and Orkney mines.
Gideon du Plessis, spokesman for union Solidarity who has been battling for years for ex-Aurora workers, said the mining assets that were sold did not even belong to Aurora. “Listening to the legal teams . . . in the North Gauteng High Court last week, I asked myself just how guilty one has to be, to be found guilty when one has political connections.”
Judge Eberhard Bertelsmann is expected to deliver a verdict on the claim against Aurora directors in the coming weeks.
New Reclamation’s lawyer, Michael Strauss, said there had “nev- IN ON THE DEAL? Zondwa Mandela er been any wrongdoing of any nature . . . in regard to Aurora”.
Strauss said there had been an extensive investigation by SARS, and the group and Harry Kassel had been extensively examined at the insolvency inquiry. “All transactions between New Reclamation and Aurora were conducted pursuant to valid agreements, copies of which were provided to SARS and to the aforesaid formal insolvency enquiry,” Strauss said.
It is understood that a police probe into this case is still continuing.
When contacted, the Bhanas refused to answer questions. Instead, Bhana spokesman Frederick Kyle threatened this newspaper: “The documents obtained by the newspaper was obtained illegally.”
Mandela said he wouldn’t comment and Hulley did not respond to requests for comment. Comment on this: write to letters@businesstimes.co.za or SMS us at 33971 www.timeslive.co.za