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Cape Town - The liquidation of Alliance Mining, the former AltX high flyer, could not be avoided.
But shareholders have the word of a lawyer representing a major shareholder that no stone will be left unturned in investigating events that led to the collapse of the high-flying mining services company.
Barry Faber, who represents influential politician and Alliance non-executive chairperson Matthews Phosa, told Fin24.com on Friday that there were most certainly irregularities that caused the collapse of Alliance.
"It's clear that money was misappropriated and that shareholders were effectively defrauded. We are sure there will be a commission of enquiry."
Phosa was part of a broad-based BEE consortium that bought into Alliance in mid-2009.
Faber said it would have been the preference of the remaining board members to make an attempt to resurrect and restore Alliance.
"With the resignation of several board members (including the acting CEO and CFO) last week he company was left rudderless."
While conceding that some of Alliance's subsidiaries could be very valuable, he stressed it was impossible at this stage to determine whether the liquidation process would yield any leftover value for shareholders.
"There are some good companies in Alliance. But at the moment I can't tell you which subsidiaries and profitable or not. Maybe it's a case of things getting worse before they can get better..."
Faber said the BEE investors were never presented with a realistic set of financial statements.
Judging by pronouncements made recently by Alliance's auditors it would seem that during the tenure of Alliance's former executive directors - including CEO Alwyn Steenkamp and FD Connie van Nieuwkerk - profits in certain subsidiaries were grossly over-inflated.
While there are now only three board members left at Alliance, Faber said Phosa was taking the Alliance matter very seriously.
"Matthews did not want to abandon ship - he is determined to see this through to the bitter end."
Alliance is one of the biggest collapses to hit the AltX - the JSE's board for small and emerging companies.
At the suspension of Alliance's shares last year the company carried a value of close to R500m. At its peak Alliance carried a market capitalisation of well over R1.5bn.
- Fin24.com
