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Durban - There's still no clear sign whether Randgold & Exploration (R&E) and JCI have reached a settlement over "widespread frauds and thefts" that could total as much as R14bn.
According to a statement released by R&E earlier this month it had extended the deadline to reach a settlement with JCI to today.
The matter relates to investments that R&E alleges vanished during the period that the late Brett Kebble was CEO of both R&E and JCI.
The settlement minority shareholders hope will be reached with JCI is separate from the R11bn claim JCI has made against Gold Fields for alleged fraud at Western Areas.
What is known is that R&E has a draft settlement in place, but apparently negotiations with JCI have hit a "rocky patch", according to a source close to the discussions.
By early yesterday afternoon JCI had not yet signed the settlement agreement. If it does a Sens announcement is expected after 17:00, if not R&E will probably put out a statement updating shareholders.
Minorities have been hoping for some return on their investment for the past three years. The matter has been frustrated, says shareholder David Palmer, by "conflicted directors" on the boards of both R&E and JCI.
But this has been resolved with the resignation of David Nurek from the boards of both companies and the resignation of Peter Gray from R&E. Gray remains CEO of JCI.
Marais Steyn and David Kovarsky, appointed acting CEO and chairman of R&E respectively, seem to have been driving the process towards a settlement.
This follows allegations that JCI is insolvent and threats of legal action by some minorities. Neither R&E nor JCI have produced financial statements for a number of years, leading to suspension of the shares on the JSE.
Asset manager Allan Gray and Trinity Asset Management are large shareholders in both R&E and JCI. "Three years is a long time. The skulduggery has been worse than people realised," says Trinity MD Quinton George. "If there is a settlement it will probably be around R1bn, about 50c in our investment rand excluding the value lost over the past three years."
R&E is also in the process of issuing summons against a number of former directors from Kebble's tenure and other related third parties (see list in Finweek). It has filed at least 15 separate claims against JCI.
The amount of R14bn, before interest, includes investments, mainly listed shares, channelled out of R&E. It appears that little, if any money from those investments found a way back to the company.
But based on a forensic report JCI did receive about R1.8bn from some of these investments, which is probably the high mark of any settlement that might be reached between the companies.
- Fin24.com