Fin24

Aurora 'was run like a Ponzi scheme'

2012-03-25 11:03

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

 

Comments
  • marcelminnaar - 2012-03-25 11:35

    The worst thing is they do it to their own people. And then they go and tell their own people that whites own SA and that whites are the Antichrist and whites steal your money and what, what, what. AT least we pay the people!!! The ANC will have 42 000 less votes in the next election.

  • braamc - 2012-03-25 14:50

    Hateful things

  • Edith - 2012-03-25 16:44

    The greed of these people is totally disgusting!

  • berni.venter - 2012-03-25 20:52

    Well the Obese Z can stand a bit of exercise. Why have his fancy cars not been seized to pay the salaries of the workers? This just sucks!!! And that Cosatu are just standing idly by with their hands in their pockets is utterly unacceptable. Cosatu members take note, if your boss is connected in anyway to government you are so utterly stuffed because Cosatu wont lift a finger to help. Time to start shopping for another union me thinks...

  • elsie.vandenbergh - 2012-11-22 08:57

    It is very concerning that Mr Solly Phetoe even dares to say that these fraudsters are untouchable because of their political connections. No one is above the law. If this is the way investigations are to be done in our Country, we need not make any further effort to "work together" It will be of no avail.

  • Gilbert Samson - 2014-05-16 17:26

    Insert the words South Africa and ANC into the following and you will more clearly see the future, "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.

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