• Healthcare headache

    State healthcare strategies must be more than political posturing, says Mzwandile Jacks.

  • Buzzwords and truths

    Mandi Smallhorne discusses her beef with the terms 'savings' and 'entrepreneurship'.

  • No love lost for SA

    A new biography shows why Elon Musk has little affection for the brutal land where he grew up.

Loading...
See More

Aurora 'was run like a Ponzi scheme'

Mar 25 2012 11:03
Jacques Pauw

THE liquidators of the disgraced – and politically connected – mine Aurora have revealed that the company only has R2 000 left in 10 bank accounts, leaving workers with no hope of ever being paid.

Media24 Investigations has established that the SA Revenue Service (Sars) has now launched a full-scale forensic audit into suspected dodgy gold deals.

Mineworkers at Aurora's troubled Orkney and Grootvlei mines, who have not been paid for almost three years, started getting emergency food aid last week.

The Sars audit comes as Aurora’s financial statements show that between September 2009 and May 2010, the company sold R130m of gold to Rand Refinery.

In the same period, however, Aurora paid out R260m to itself and creditors from its 10 accounts, raising suspicion that the company sold far more gold than it officially declared.

Aurora liquidator Gert de Wet of KaapVaal Trust told City Press that he couldn’t find any labour contracts between the company and its workers. There was no payroll either.

Aurora took over the running of the two mines towards the end of 2009 when the owner, Pamodzi Gold, went into liquidation. At the time, the mines were fully operational.

Aurora itself was liquidated in October last year. The company used an affiliate, Kaunda Global Mining Resources, to run the mines.

De Wet says there is also no evidence that the company ever paid a percentage of the workers’ wages to the Workman’s Compensation Fund (UIF). He can also not find any evidence that Aurora paid VAT on its transactions.

This has opened up the company and its directors – among them President Jacob Zuma’s nephew, Khulubuse Zuma, and Nelson Mandela’s grandson, Zondwa Mandela – to charges of fraud and corruption.

“Aurora was bankrupt from the start,” said De Wet. “It is almost a Ponzi scheme.”

He says the liquidators would “try their best”, but it did not seem there was any money left to pay the workers.

Pamodzi liquidator Johan Engelbrect told City Press he would take legal action against Aurora directors this week to compel them to repay the millions of rands of damage caused to the mines.

De Wet confirmed allegations from workers that Aurora management concealed gold and that not all transactions were properly reflected.

Engelbrecht agreed that the running of Aurora boiled down to virtually a “Ponzi scheme”, and mentioned prima facie evidence of fraud and theft committed by its directors.

Workers at the Orkney mine say last month alone electrical cable worth more than R3m was removed.

In October 2009, Aurora took control of Pamodzi Gold’s two mines and seven mine shafts. It promised a R600m investment in the tired mine, as well as job security for the mineworkers and educational bursaries for their children.

Six months later, it stopped paying its workers. Several shafts are nothing more than stripped skeletons.

Aurora has been accused of destroying 5 300 jobs, impoverishing 42 000 people and polluting wetlands.

Aurora is currently involved in an insolvency hearing in the Pretoria High Court. One of the issues to be decided is liability for selling the mine’s assets.

If Aurora is found to be liable, it will possibly face civil and criminal charges. The company owes workers about R20m in salaries. Each worker is owed about R180 000, on average.

Gideon du Plessis, trade union Solidarity’s deputy general secretary, said it was “very unlikely” that workers would get their outstanding salaries and compensation for the pain and suffering they had endured.

“We would like to see the perpetrators end up in jail,” he says.

A raft of court orders instructing Aurora and Zuma to make payments of millions to various parties – including workers – have been ignored.

Cosatu North West secretary Solly Phetoe said their political connections made them “untouchable”.

“These directors will not be held accountable because they are related to Nelson Mandela and Jacob Zuma,” he said.

Aurora commercial director Thulani Ngubane did not respond to requests for comment.

- City Press

 
aurora empowerment systems

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
6 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About...

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Eskom’s decision not to give its staff bonuses is:

Previous results · Suggest a vote

Loading...