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Num: Pay workers first in liquidations

May 30 2012 16:27 Sapa

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Parliament - The National Union of Mineworkers (Num) wants MPs to rework liquidation laws so that workers are paid out before investors when companies go bankrupt.

Num parliament head Madoda Sambatha told the portfolio committee on mineral resources on Wednesday that the case of Aurora Empowerment Systems had shown how workers could be credit blacklisted after not being paid by a liquidated firm.

"The Insolvency Act must be amended in terms of liquidations," Sambatha said.

"Workers should be the first ones to be in line for payment under any circumstances for liquidations. Currently it is investors and not workers."

Aurora, whose directors include Khulubuse Zuma, Zondwa Mandela and Thulani Ngubane, took over the liquidated Pamodzi Gold group's mines in Grootvlei on the East Rand and Orkney in North West in October 2009.

The mines were fully operational at the time.

Aurora was placed in liquidation in October last year after it failed to pay creditors and about 5300 workers.

Members of the Bhana family, who were appointed to advise the Aurora board as "financial consultants", are alleged to have been the driving force behind the management of the mines.

The Mail & Guardian newspaper reported that the Bhanas raised money from family members in South Africa when it became clear that Aurora was in financial trouble, but repaid it with up to 100 percent interest at exactly the time as the mines' workers were not being paid.

Workers and their families, who could not afford to eat, had to be given food parcels by charities.

"It is a very bitter experience that we have seen with these liquidations," Sambatha said.

"This one has been the clumsiest liquidation that we have ever dealt with. Liquidation has an impact on children. This is how brutal the capitalist system can be."

Sambatha said any director whose company had been liquidated should be blacklisted. He said Aurora directors had celebrated making money when they failed to pay salaries to mineworkers.

"They must be blacklisted as directors so that they are not allowed to be directors in other companies," he said.

"On this one we will call for tight regulations.

"Parliament must rise on this one."

Representatives of Aurora Empowerment Systems failed to arrive for the briefing.

No reason was given for their non-attendance.

liquidations  |  num
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