Zuma only Aurora director exempt from fraud charges | Fin24
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Zuma only Aurora director exempt from fraud charges

Jun 25 2015 12:10
Ahmed Areff

Pretoria - Fraud charges can be brought against all Aurora directors except President Jacob Zuma's nephew Khulubuse Zuma, the High Court in Pretoria ruled on Thursday.

Judge Eberhard Bertelsmann found all the directors were reckless in managing the Pamodzi Gold mine it took over, and were liable for all costs.

Zuma however was only held liable for costs after December 2009.

In 2009, Aurora was appointed by liquidators to manage the mines in Springs and Orkney.

However, the company instead stripped the mines of R1.7bn worth of infrastructure and also left thousands of employees without pay and surviving on handouts.

Bertelsmann found that the late former president Nelson Mandela's grandson Zondwa Mandela, Sheshile Thulani Ngubane and Sulliman and Fazel Bhana were guilty of wilful deception by presenting documents containing false assertions to liquidators.

"The applicants are therefore entitled to the order they seek against them both on the basis of fraudulent misrepresentations in the bid documents and on the grounds of the reckless conduct of the insolvent companies' business."

The judge said Zuma was in a slightly different position from the other respondents.

"It is common cause that he was not involved in the day to day management of Aurora's business. He was not directly involved in the negotiations with the liquidators and was informed from time to time by the other respondents or (the president's legal adviser Michael) Hulley about the state of affairs.

READ: Zuma nephew: I am not answerable for Aurora

"He must have known of the difficulties that arose towards the end of 2009 and cannot have been unaware of the Department of Minerals and Energy's notice to close down the Grootvlei mining operations in November of that year.... (Zuma) was clearly one of the two directors who could bring political connectivity to the table and must therefore have known of the crisis that confronted the proposed transaction," Bertelsmann said.

"His failure to act once he knew of the dire state of affairs is clearly a reckless disregard of his duties as a director. If he really did not know, it is because he deliberately chose not to be informed.

"The first respondent (Zuma) should be held liable for all losses that were incurred on or after December 1 2009."

Trade union Solidarity's general secretary Gideon du Plessis, when asked by reporters after the judgment who the real culprit at Aurora was, said the respondents besides Zuma were involved and were found guilty of fraudulent misrepresentations, while Zuma was found guilty of reckless management.

"The end result is that they were all found guilty in their personal capacity and that they are all liable... for payments and damages. The difference is that charges of fraud can be brought against all the directors except Khulubuse Zuma."

He also said the judgment "opened the door" to an application against  Hulley.

READ: Zuma lawyer could get sued over Aurora

"So very soon an application will be brought against Michael Hulley, since it was clear in the judgment that he was part of the company at one stage, so it is very likely that he will be held liable in his personal capacity."

In 2011 Hulley testified before a commission of inquiry that he had been approached to act as a non-executive director of Aurora, but was never appointed. He said that he merely assisted Aurora in an advisory capacity, despite letterheads of the company indicating that he was a non-executive director.

Du Plessis said the judgment was a victory for workers and for justice.

Workers can only get R28 000 each

"There's a route now that we need to follow if the Aurora directors don't follow this judgment and pay back the money and for all the damages, and the money to the workers - it means they will be sequestrated and then their assets will be sold off," he said.

"We will push hard for the money to be paid. The first money that needs to flow in the bank account must go to the workers, and we will push hard for that.

"The total amount can be up to R1.7bn, so the damages, all the replacement value of the assets, all the outstanding (money) for the workers, the more than R2m gold sales that disappeared - all of that is part of the quantum.

"For the workers unfortunately, since Aurora was liquidated, the maximum they can get is R28 000 (each)."



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