Aurora got R13m – but where did it go?

2010-10-27 12:33

The politically connected Aurora Empowerment Systems has received R13?million from a Swiss investor to save the struggling Pamodzi Gold mine, but it is not clear what the money has been used for.

Also, it “appeared” that more funding from a state-owned Chinese consortium had been secured, liquidator Enver Motala said in an email to Sapa.

Yet workers who have not been paid salaries since March, had not received a cent from Aurora, which is headed by Nelson Mandela’s grandson Zondwa, and President Jacob Zuma’s nephew Khulubuse.

Motala, who is one of six joint liquidators and who has been tasked with handling media enquiries, said in the e-mail that the Swiss-based Global Emerging Markets (GEM) had made some funds available to Aurora, which had put in a bid to buy the insolvent Pamodzi Gold mine at Grootvlei on Johannesburg’s East Rand, and in Orkney in North West.

“The GEM funding has materialised. In this respect initial interim funding in the approximate amount of R13?million, was advanced to Aurora. The funding is based on a draw down facility,” Motala said.

“For further details, I suggest that you contact Aurora,” he added.

Aurora’s spokesperson, Michael Hulley, did not respond to emailed questions and his cellphone was switched off. He told Sapa last week: “If there’s something significant that has happened we will let you know.”

Neither Zuma nor Mandela answered their phones.

The R13 million in funding was news to the National Union of Mineworkers (NUM) branch chairperson, Frasy Namanyana.

“Funding? Whatever, whatever. The situation remains unchanged. People have not been paid and the water and electricity is still cut off. We have received nothing at all,” said Namanyana, who lives in a hostel at Grootvlei mine.

Motala was responding to a list of questions sent to him by Sapa last week to give him an opportunity to respond to a series of allegations that had been levelled against him and Aurora.

He declined to answer a question on why the miners had not been paid yet, considering they had been promised all outstanding monies by September 30.

“You must pose this question to Aurora,” said Motala.

Nor did he want to comment on claims Aurora deducted pension fund and Unemployment Insurance Fund money from salaries, but never paid this money over to the fund. These were “operational issues”, he said.

He said Aurora seemed to have secured more funding from China.

“At this stage, it appears that Aurora has managed to secure other funding from a state-owned Chinese consortium. The details of which, you must obtain from Aurora, as there are confidentiality agreements in place.”

Aurora has made several claims in the past that funding had been secured to get mine operations back on track and pay outstanding wages.

More recently, the Swiss funder GEM apparently agreed to release R50?million of its pledged R750?million to the liquidator by the end of last month.

Motala did not respond to follow-up questions on why GEM only released R13?million.

NUM has called for the liquidation process to be nullified, saying it was obvious the process involving Aurora had failed.

Unionists have accused Motala of protecting Aurora because of its political muscle, instead of protecting the creditors.

Motala responded: “I, together with my Joint Provisional Liquidators, acting jointly, are not ’protecting’ Aurora and keeping them ‘artificially alive’. We
have a fiduciary duty to do that which we are instructed to do by the Major Secured Creditors. It is not within our power to keep Aurora artificially alive
nor is it within our mandate to do so.”

He said one other company, Virgile Asia Mining, had made an offer to purchase Pamodzi Gold East Rand and its subsidiaries, and Pamodzi Gold Orkney.

“Initially, the offer was made in amounts in excess of Aurora’s preferred bid. However, the offers were dramatically reduced with a subsequent offer and fell dramatically short of Aurora’s offer. Naturally, this offer was not acceptable to the Secured Creditors.

“However, we have been in contact with Virgile Asia Mining and have requested them to do a proper and more meaningful due diligence, and resubmit a more reasonable and realistic offer to us, after which we will take instructions from the Secured Creditors,” said Motala.

Pamodzi Gold mine ran into financial difficulties in 2008, and, since then, several funding possibilities had fallen through.

Earlier this year, Aurora announced it had secured enough funding to buy Pamodzi’s Grootvlei and Orkney mines – which employed about 5?000 workers – from its liquidators.

But red tape and empty promises had left the miners unpaid for eight months, while operations at the mine had ground to a halt.

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