Aurora execs liable for mine failures
Judge finds directors ‘indisputably reckless’
A NEPHEW of President Jacob Zuma, a grandson of Nelson Mandela and three others have been found liable for the cost of the destruction of the two liquidated Pamodzi gold mines, which had been under their control.
Khulubuse Zuma and Zondwa Mandela were among the directors of Aurora Empowerment Systems, and are personally liable for its failure, according to a ruling handed down by Judge Eberhard Bertelsmann in the North Gauteng High Court in Pretoria yesterday.
Disrepair
Despite the court ruling, it will probably take years for them to compensate the 5 000 employees who lost their jobs when the directors failed to raise the required funds to get the mines up and running. The mines then fell into disrepair and were ravaged by illegal miners.
Judge Bertelsmann ruled yesterday that Zuma and Mandela, Solly and Fazel Bhana, as well as Thulani Ngubane, should be held personally liable for the mismanagement of the Orkney mine in the North West and the Grootvlei mine in Springs in Gauteng.
The directors were “indisputably reckless”, the judge said. Assertions contained in Aurora’s bid documents for Pamodzi’s Orkney mine were a “figment of an overactive imagination”, he said.
Zuma, who was the chairman of Aurora and said he did not have an executive or operational role in the business, was jointly liable for all losses incurred after December 1, 2009, Bertelsmann said.
Aurora began managing the two mines late in 2009 after it was named the preferred bidders for the Pamodzi assets.
The Pamodzi liquidators wanted the Aurora directors to pay about R1.7 billion after allegedly stripping the mines and selling items like headgear from the shafts as scrap, and for failure to pay the salaries of employees.
Pamodzi’s creditors would start the process of preparing claims, John Walker, the liquidators’ lawyer, said.
The directors have indicated that they will appeal the judgment.
Not guilty of fraud
Vuyo Mkhize, the spokesman for Zuma, said yesterday that the liquidators would have to prove how they had arrived at the R1.7bn that they claim was owed to them.
Mkhize said the judge had found that Zuma was not guilty of any fraudulent or dishonest conduct. Zuma planned to appeal the judgment as he had contributed R35 million of his own money towards salaries and payment of the mines’ security company, Mkhize said.
Mava Mguga, 51, a former Orkney employee, said he was happy with the judgment.
“We have hope that we will finally get money. Many of our colleagues have died, some are ill and many of our children have had to drop out of school because we did not have means to provide for our families,” he said.
Labour unions welcomed the ruling.
Gideon Du Plessis, the general secretary of trade union Solidarity, said the ruling was a signal that strong political links were not above the law.
“While nothing can compensate them (workers) for the losses they have suffered, and although further legal process have to follow before the money can be collected, this judgment (has) at least brought justice for them,” Du Plessis said.
The National Union of Mineworkers said the judgment was the light at the end of the tunnel. “We have always believed… that (the) Aurora directors were not credible.
“We are happy about the judgment, but we are, however, worried that their lawyers have indicated that they are going to appeal the judgment and this is another delay. We have instructed our lawyers to meet the liquidators and chart the way forward to demand the payment for the workers as soon as possible.”
Aurora had said it would pay R605m for the two operations and invest a further R350m. However, Aurora never came up with the money. – Additional reporting by Bloomberg
Assertions in bid documents were a “figment of an overactive imagination”.