Battle for mining riches goes to court

2010-04-17 08:23

THE acrimonious battle for control of vast platinum riches

belonging to a North West tribe, the Bakubung-Ba-Ratheo, is deepening.

A court action masterminded by Margaret Monnakgotla, who claims she

is acting for the tribe’s royal family, has sucked in four of the country’s top

five banks and a little-known stockbroker, Afrifocus ­Securities.

Retail banks Absa, Standard Bank and Nedbank, and investment and

private banking firms Investec and Afrifocus have been listed as respondents in

a legal bid by Margaret to wrestle control of the Bakubung’s wealth, trapped in

JSE-listed Wesizwe Platinum, from her brother, Ezekiel Monnakgotla.

On Friday Margaret will apply for an interdict in the Mafikeng High

Court to restrain the banks and Afrifocus from taking any instructions regarding

the tribe’s assets and monies from anyone other than herself, advocate M H

Masilo or a court.

Masilo, who is listed as the administrator of the Traditional

Council of the Bakubung, surfaced following the ousting last month of Ezekiel as

the acting chief of the tribe by some royal family members.

Lawyers acting for some of the respondents dispute Margaret’s

authority, saying “the premier is due to hold meetings with interested parties

relating to the very issue of authority and representation within the

community”.

Last month Ezekiel, who had been acting chief since 2003, lost a

court bid to reinstate himself on the throne after his relatives threw him out

for alleged misconduct.

The court application also seeks to prevent Ezekiel, the council

and its influential member, Disele ­Johannes (DJ) Phologane, from purporting to

represent the Bakubung and from conducting the tribe’s ­affairs.

Margaret is also attempting to ­restrain the traditional council,

Ezekiel, Phologane, a special purpose vehicle (SPV) company, Newshelf 925,

financial advisers Musa Capital and the firm’s employee and US citizen, Antoine

Johnson, from “disposing or encumbering” the assets of the Bakubung.

At the heart of the battle, which has split the royal family, is

the sale of 44 million Wesizwe shares held by the Bakubung in the platinum miner

through a trust.

In court papers Margaret claims the shares were sold to Newshelf

and she does not know what happened to the proceeds, which are believed to total

about R500 million.

The infighting in the royal family is also muddied by the

involvement of Musa Capital, which was appointed in 2007 by the Bakubung to

advise it on a strategy to “monetise” (turn into cash) the tribe’s Wesizwe

shares for infrastructure development projects.

In a presentation made in April 2007 to Bakubung’s leaders, Musa

promised to implement the monetisation plan “while minimising the need and risk

to sell any existing shares”. At the time Musa, whose directors are US citizens

William ­Jimerson and Johnson, said it could raise between R300 million and

R500 million from the process and invest it in cash generating non-mining

ventures to diversify the tribe’s investment portfolio away from platinum

mining.

What has happened since is that 44 million Wesizwe shares have been

sold to Newshelf, an SPV of which Johnson is a director.

Phologane, who sits on the traditional council and Wesizwe board,

said the Bakubung raised R527 million from the the monetisation plan.

“This money is being safely managed, is fully accounted for and is

being put into implementation vehicles of the community,” he said.

He said Newshelf was owned by the Industrial Development

Corporation (IDC), the Bakubung, and a black empowerment consortium. Phologane

declined to reveal the shareholders of the black consortium. Newshelf currently

owns 11.94% of Wesizwe.

KPMG has established that German investment bank Deutsche Bank and

South Africa’s largest industrial lender, the IDC, funded the transaction.

The funders allegedly refused to disclose details of the

transaction, citing a confidentiality agreement.

Margaret claims the money could not be traced in a number of the

Bakubung’s bank accounts at Standard Bank, Absa and Nedbank.

The tribe now owns 12.16% stake in Wesizwe, which is valued at

R173 million, while Newshelf’s ­interest is worth R165 million.

Lawyers acting for Musa, Newshelf and Johnson have dismissed the

allegations against their clients.

“These allegations are defamatory and therefore materially damaging

to our clients’ collective reputation and will be disproven in the appropriate

forum,” reads a letter from Edward Nathan Sonnenbergs.

“Our clients deny any impropriety and reaffirm that they have acted

at all times both with explicit ­authority and verifiable integrity.”



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