Aurora liquidators target Enver Motala

2014-08-31 15:00

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Former liquidator Enver Motala is one of three new targets the remaining liquidators of Pamodzi Gold plan to claim millions of rands from.

This week marked the first small victory in the long saga following the company’s provisional liquidation in 2009 and the disastrous attempt by Aurora Empowerment Systems to buy and revive its mines.

The Bhana family failed in an attempt to stave off a claim for R16?million.

Alongside Motala, three other people who had contributed money to Aurora in the early days of the debacle, and received money back out, are now being pursued for roughly another R20?million.

These include Woody Chammas, the son of Aurora’s auditor back in 2009, who had pitched in R1?million to cover Aurora’s deposit to bid for the Pamodzi assets in the first place.

Motala told City Press on Friday he “had no information” on the case against him but would “vigorously oppose” it if and when it came.

“They have no basis in law?...?I had given money to help the poor desperate workers. It was of no benefit to me.”

Motala had loaned R3?million to Aurora to pay workers’ salaries and though he received that money back, he says he received no interest.

AW Wholesalers, a furniture company based in Joburg’s Fordsburg suburb, is apparently another. Motala had in effect been in charge of the liquidation of Pamodzi until he as well as Gavin Gainsford were removed in May 2011.

This was after the other four liquidators had applied to the master’s office to have Motala removed from the approved list of liquidators altogether.

Five days later, the remaining liquidators kicked Aurora out of the Pamodzi mines, after Motala had allegedly been the main reason it had not happened a lot sooner.

It emerged around that time Motala was in fact Enver Dawood and had changed his name to disguise fraud convictions that would disqualify him from acting as a liquidator.

Despite this, Dawood/Motala had for more than a decade presided over multiple high-profile liquidations.

The case against the Bhana family this week is the first part of an attempt to recoup money paid back to a group of family, friends and associates of Aurora’s advisers, Suliman and Fazel Bhana, the father-and-son team responsible for arranging Aurora’s funding.

Altogether R35?million is being chased in two tranches, according to John Walker, the liquidators’ lawyer.

On Friday, the claims against Motala, Chammas and AW Wholesalers were filed in court. Another one is pending against an individual in Durban.

The basis of these claims is that these creditors were taking money out of Aurora while other creditors were left in the lurch.

But Suliman Bhana told City Press on Friday the order was granted prematurely, and they intended to appeal the ruling.

In court papers filed for the separate case against Aurora’s directors, “a written loan agreement was concluded between Aurora and Chammas, who was repaid the R1?million by Aurora once the R1?million was refunded by the joint provisional liquidators”.

They go on to say that Chammas is in possession of the loan agreement, although it was not included in the court papers like most other documents referred to.

What next

This week, the R16?million the Bhanas had to pay back was overshadowed by the postponement of the far more dramatic claim for R1.7?billion against Aurora’s directors as well as Suliman and Fazel Bhana, in their capacity as advisers to the company.

The directors in question are the president’s nephew Khulubuse Zuma, former president Nelson Mandela’s grandson Zondwa Mandela as well as Thulani Ngubane.

Aurora itself was liquidated some time ago and the Pamodzi liquidators are trying to hold its directors personally liable for alleged damages of R1.7?billion.

To do this, they need to demonstrate that the directors ran Aurora in a reckless or fraudulent way. If they succeed in getting the court to hold the Aurora directors responsible, it will probably result in sequestration orders – selling their assets to recoup the cash.

According to Johan Engelbrecht, one of the four remaining liquidators of Pamodzi Gold, actually recovering the full R1.7?billion is probably “far-fetched”.

The total claims on Pamodzi by creditors roughly add up to R1?billion, he says.

What did emerge this week is the clear split of the Aurora role players into two opposing camps, with Khulubuse Zuma trying to pin the blame on his former partners.

Ngubane filed an affidavit on behalf of all the others pursuing a completely different legal strategy from Zuma’s – and telling a fundamentally different story about who did what at the ill-fated company.

This seems to follow old friendship ties.

The Bhanas have known Mandela since he was a child and have known Ngubane for 12 years, according to the affidavit.

They were introduced to Zuma by Ngubane.

Zuma’s version states he was a relatively uninvolved chairman and didn’t really know what was going on on the ground. In his papers, he repeatedly refers allegations to Mandela, Ngubane and the Bhanas, saying he simply doesn’t know.

Zuma’s real legal defence is more technical.

According to his affidavit, there is no claim against Aurora and, as a consequence, there cannot be a claim against its directors.

He also claims the interim contracts signed with Aurora to run the mines between 2009 and 2011 were invalid to begin with, meaning Aurora cannot be accountable for not sticking to them.

The affidavit of all the other directors involves an incredibly detailed blow-by-blow account of how they created Aurora – and how circumstances beyond their control continuously undermined all their attempts to raise the money to buy and restore the Pamodzi mines.

It also asserts that Zuma was in fact as involved as all of them were.

Ngubane also tries to turn the tables, accusing the liquidators of sabotaging the last funding deal Aurora was setting up when they got kicked off the mines.

This was a promised $100?million investment from Shandong Gold, apparently brokered by Zuma while visiting China as part of a delegation with his uncle, the president, in 2011.

That money would have come through if the liquidators hadn’t kicked out Aurora, Ngubane claims.

“The liquidators have only themselves to blame for what ultimately transpired.”

Ngubane and the Bhanas are insisting that a proper trial is needed and list at least 36 different witnesses that would have to be called, from bankers to mine managers, the dismissed liquidators and Chinese investors.

There are “irresolvable disputes of fact”, they say.

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