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Khulubuse Zuma: I was negligent at most, not reckless

Sep 18 2015 13:11
News24 Correspondent

Pretoria - The directors of Aurora Empowerment Systems may not appeal against a ruling that they are personally liable for the destruction of Pamodzi Gold's Grootvlei and Orkney mines.

High Court Judge Berhard Bertelsmann on Friday turned down the applications of Khulubuse Zuma, Zondwa Mandela, Thulani Ngubane, Sulliman Bhana and his son Fazel for leave to appeal against his damning judgment in favour of Pamodzi's liquidators.

Their failure to obtain funds and mismanagement of Aurora resulted in the destruction of the mines and 5 300 workers losing their jobs.

The liquidators estimate that the amount involved could be as high as R1.7bn.

Zuma, who is President Jacob Zuma's nephew, insisted he had never been aware that Aurora was being mismanaged and the contribution of R35m from his own funds to pay workers showed he cared and was at most negligent, not reckless.

The rest of the directors argued that they had at all times entertained the genuine belief that they would get funds to restore the damage to to the mines.

They argued that the liquidators had also not proven their status as creditors of Aurora.

Judge Bertelsmann shot down their arguments in another blistering judgment, saying there could be no doubt that the directors had acted recklessly, and in the case of Mandela, Ngubane and the Bhanas fraudulently.

He said their submissions should be seen against the background that not one of the court's factual findings had been attacked as incorrect.

Fraud

It was common cause that Aurora was insolvent from the day of its incorporation and that all of the directors were aware of this at all times.

"The funding (they) sought to obtain ... was dependent on several suspensive conditions, inter alia that they controlled a company listed on the JSE.

"Not one of the conditions set ... for the provision of funds were ever fulfilled.

"The bid documents presented to the liquidators contained several untrue and intentionally misleading statements that constitute fraud upon the addressees thereof.

"The applicants took control of the mines without any funds at their disposal other than R15m borrowed from community members.

"The mines deteriorated financially and in all managerial respects from the moment the applicants took control thereof and had to be placed in care and maintenance without any funds ever being obtained to rescue them. The applicants left the work force in the lurch.

"(They) undertook in their agreements with the liquidators to manage the mines the properly, but breached these undertakings virtually immediately. Not one of (them) ever visited the mines after March 2010.

"Two fatalities occurred at the mines and the Department of Mineral Resources' decision to close the mines down could only be ameliorated by invoking the first and second applicants' political connections.

"(Zuma) was informed of the company's and the mine's dire condition and was persuaded to contribute R35m to partially and temporarily address these problems, without thereafter taking any action to prevent the rot from spreading," he said.

The judge found that the liquidators' status as creditors could not be disputed in law as their claims were properly proven at a creditors meeting.

Justice

That their claims still had to be quantified did not detract from their status as creditors, he added.

Zuma's spokesperson Vuyo Mkhize said his next step would be to petition the Supreme Court of Appeal for leave to appeal, as he believed the court's findings against him were likely to be overturned.

Trade Union Solidarity's general secretary Gideon du Plessis said justice had been done for hundreds of Aurora employees and the ruling was an indication that others involved in the case would not be able to hide from the law.

He said some of the directors have already indicated that neither they nor their families would be able to pay the money, which meant that they could soon be sequestrated.

Du Plessis said he hoped the Aurora directors would no longer attempt to delay the legal process and that they would begin to bear the consequences of their actions.


aurora  |  mining
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