Mine, directors face theft case
SAMANCOR: DIRECTORS ALSO FINGERED FOR MASSIVE GRAFT OF $1.9BN Union detected low returns for minority shareholder.
Union detects low returns for Samancor minority shareholder and fingers graft of $1.9 billion.
Amcu is gearing up to take on Samancor Chrome on behalf of workers. The union’s president Joseph Mathunjwa detailed the case at a joint media briefing that the union and its partners Richard Spoor Attorneys and the Alternative Information and Development Centre (AIDC) held in Rosebank.
The parties outlined the estimated $1.9 billion theft and profit shifting case against Samancor and its directors, including former chair Danko Končar and chief executive Jürgen Schalamon.
Mathunjwa said the case against Samancor was prompted by the union detecting low returns for Samancor’s minority shareholder, the Ndizani Workers’ Trust, the employees share ownership scheme.
Mathunjwa said the union began to have suspicions after Samancor resisted Amcu’s attempts to obtain recognition as a trade union at the mine despite proving that it had representation. This went on for almost five years.
“This is when we started digging deeper,” said Mathunjwa.
Amcu enlisted the assistance of the AIDC but it wasn’t until the union received information from a “key whistleblower” – which the amaBhungane Centre for Investigative Journalism names as Miodrag Kon, a former director at Samancor – that it was able to confirm that the “suspicions were likely true and billions of workers’ hard-earned money is allegedly being stolen”.
Kon provided the union with 1 000 documents, including the annual reports from 2006 to 2008.
Some of the key accusations Amcu is placing against Samancor include:
Samancor sold 50% of its subsidiary Tubatse Chrome to Chinese Sinosteel for $225 million, but instead of all that money going to Samancor, $125 million was siphoned off to a Nedbank bank account in London in April 2007 owned by British Virgin Island company Kermas BVI, to the benefit of three directors.
Kermes BVI also received sales commissions of a minimum 9% with no meaningful service provided.
Baseless management fees in 2008 to the amount of $4 million.
A flawed business deal with Australian mining company Sylvania for the extraction of chrome and platinum group metals from tailings dams since 2006; allegedly secured by a bribe with 14.1 million shares in Sylvania going to two Samancor directors.
Open sesame
Amcu’s attorney Richard Spoor said they are seeking a court order to compel Samancor, which is a private company, to produce accounting for several transactions which they say constituted a fraud of minority shareholders.
Spoor said once they have the accounting and have analysed the financial flows, they will follow up with a trial action where they will seek relief and the appointment of independent directors at Samancor. In addition, they will ask for certain agreements that they allege are illicit and prejudicial to minority shareholders to be set aside.
They also want the court to make an order on compensation under the provisions of section 163 of the Company’s Act to the Ndizani Workers’ Trust. Spoor said there will be a request to compensate the whistleblower.
Samancor said in a statement it had taken legal advice on the allegations made by Amcu “with the assistance of the so-called ‘brave whistleblower’ who is requesting compensation”.
“Samancor views this as malicious and opportunistic,” it said.
The mine said its board and the recognised unions would commission an independent investigation into the allegations raised.