Company braces for R67.2m legal fight

2010-10-09 12:10

Johannesburg-listed oil and gas company Sacoil Holdings is bracing itself for a bruising legal showdown with investor Joe Modibane, who is suing it for R67.2 million for allegedly reneging on an agreement to sell him shares.

Sacoil chief executive Robin Vela said the company had appointed law firm Deneys Reitz to help it mount a legal defence against the Soweto-born businessman, whom it has labelled a “vexatious litigant”.

“The claim against us has no substance and we are confident that there is no agreement … but he is disgruntled and it is his prerogative to approach the courts to seek relief,” Vela told City Press this week.

The claim against Sacoil comes at a time when Modibane is awaiting a judgment on a R7.2-billion lawsuit against the Industrial Development Corporation, in which he is suing the state-owned lender for allegedly cancelling a contract in 2002 to sell him 35.3 million shares which it held in steel producer Iscor.

Iscor, now known as ArcelorMittal South Africa (Amsa), is part of Indian billionaire Lakshmi Mittal’s global steel empire, which he acquired eight years ago. Modibane is an investor in Sacoil and Amsa.

In court papers filed in the North Gauteng High Court last month, Modibane alleges that he entered into an oral agreement with Sacoil on July 21 this year to buy 105 million ­ordinary shares in the company at a price of 30c a share.

The deal, struck barely a month after Sacoil won a major oil concession in the Democratic Republic of Congo (DRC), was allegedly repudiated a day later via an SMS from Vela.

“The defendant (Sacoil) is liable in the amount of R67.2 million calculated as the difference between the price of the Sacoil ordinary shares on July 5, 2010 of 30c a share, and the price on September 13, 2010, the date of this summons, of 94c a share,” read the court papers.

Sacoil has not submitted court papers responding to the lawsuit. But it is treating it so ­seriously that on September 15, a day after Modibane filed his court papers, it published a statement on SENS, the Johannesburg Securities Exchange’s news and information service, informing its shareholders.

“The plaintiff is a regular litigator and has instituted a number of actions against South African corporates in recent years.

“Having regard to the information in its possession, the board of directors is of the view that the claim is without factual foundation and is vexatious in nature,” the company told investors.

Sacoil is 32,63%-owned by the Encha Group, a company led by Tiego Moseneke, the brother of Deputy Chief Justice Dikgang Moseneke.

A further 25,18% is owned by Encha Capital, a joint venture between Encha Group and asset manager Investec Asset Management, while institutional investors Metropolitan Asset Management and Standard Bank-controlled Stanlib hold 13,6% and 6,46% respectively.

Vela said he was confident that the lawsuit would not derail Sacoil’s ­efforts to develop itself as a Pan-African company worth $2 billion (about R13.7 billion)over the next two years, participating in exploration and upstream energy projects.

He said the joint venture Sacoil signed this week with Nigerian firm Energy Equity Resources was proof that the lawsuit would have no effect on the future plans of Sacoil.

The partnership will give Sacoil ­access to Nigeria’s vast oil and gas fields. “It is a sideshow and a bit of a distraction. We signed the joint venture with our Nigerian partners despite the lawsuit being in the public domain,” Vela said.

City Press had not been able to reach Tiego Moseneke for comment at the time of going to press.

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