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Johannesburg - A forensic investigation into Pamodzi Gold's demise last year is being planned to determine why the junior mining group's affairs went so badly awry.
On Friday the liquidators of the mining group's three operating subsidiaries will meet with legal representatives to put together a court application for the investigation, said Enver Motala, one of the liquidators.
According to him, the investigation was requested by the majority of creditors.
Pamodzi's Free State, Orkney and East Rand mines were provisionally liquidated last year after the company had landed so deeply in debt that it was unable to pay wages or its water accounts.
The Free State operations have since been sold to Harmony by the liquidators, while Aurora Empowerment Systems has taken over the other two subsidiaries.
The three liquidated mines were jointly indebted to the tune of R1.6bn, while the sale of the assets produced just over R1bn.
But this was before costs, and these costs will increase the longer the investigation takes.
Although the scope of the investigation is confidential, Motala says that it will include establishing whether the Industrial Development Corporation's R200m emergency loan to Pamodzi about a year ago was employed as agreed. In terms of this agreement the money was intended for the Free State and Orkney operations' urgent capital requirements.
An enquiry will also be conducted into whether Pamodzi's management acted recklessly or obtained services from creditors knowing they were unable to pay.
Such an investigation, in terms of Sections 417 and 418 of the Companies Act, could lead to criminal prosecution of the gold group's former managers.
There is also a slight chance that creditors will get more money back. But, says Motala, it is equally possible that the investigation produces nothing.
The investigation should be concluded before money is paid out to creditors.
But it will be a "long and difficult" process and an interim payment with monies already collected is under consideration.
The sales to Harmony and Aurora have however not been finalised, although Harmony's acquisition of the Free State assets, according to Motala, will soon be complete.
The Aurora acquisitions are expected to be concluded only at the end of April, which implies that the earliest repayment would probably be in July.
Motala explains that it will be difficult to say how much creditors will receive, but the dividend will be good.
- Sake24.com
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