Amcu ropes in human rights lawyer Richard Spoor to lead battle against Samancor
THE ASSOCIATION of Mineworkers and Construction Union (Amcu) has roped in the human rights lawyer and civil suit litigator, Richard Spoor, to lead its legal battle against Samancor for allegedly shifting R28 billion in profit.
Amcu accused the directors of the world’s second-largest chrome producer and shareholders of engaging in transfer mispricing, profit shifting since 2006. It said they siphoned off billions from the company to the prejudice of its minority shareholders and the benefit of the directors of Kermas Limited based in the British Virgin Islands, a tax haven.
The allegation was made by a whistle-blower, a former Samancor director, and the preliminary calculation suggests these transactions and agreements might have deprived Ndizani Ndizani Workers’ Employee Share Ownership Programme of “well in excess of” $100 million (R1.52 billion).
Samancor has become the second mining company that the union has blamed for illicit financial flows after alleging in 2015 that Lonmin had attempted to hide R400m a year between 1999 and 2012 in the tax haven of Bermuda.
Amcu president Joseph Mathunjwa told journalists the union was aiming to investigate mining companies that were responsible for illicit flows.
“We will leave no stone unturned. We are going to check every company that is behind questionable transactions,” said Mathunjwa, citing the union would compensate whistle-blowers.
“Amcu is prepared to put R100 000 on the table for any whistle-blower who can come with credible information on illicit flows by these companies.”
Mathunjwa said the union had approached the court to seek an order to force Samancor to account for the true value of the transactions that it alleges constituted a fraud of minority shareholders.
The transactions include an allegedly siphoning of $125m to a bank account at Nedbank in London in April 2007 owned by British Virgin Island company Kermas BVI, to the benefit of three directors.
Samancor said it had not been served with the application, and it viewed the allegations as malicious and opportunistic.
It, however, said it had agreed to an independent investigation into the allegations.
“The matter will be dealt with through the appropriate forum at a suitable time and court process will be followed,” it said.
Mathunjwa said the union would proceed to seek the appointment of independent directors and the award of compensation to persons harmed by the transactions if granted the court’s leave.
Spoor, who is leading a class action against Tiger Brands for last year’s listeriosis, said he was helping the union to call for an accounting of the transactions.
“Once an accounting has been furnished and we can see the details of the agreements and the details of the monies that flowed, where they went and how they went, we will follow up for a trial action for certain relief.”
He said the relief would include the appointment of independent directors and setting aside the variations of the transaction that prejudiced the minority shareholders.