It’s Aurora all over again

2014-01-26 14:00

Goldrich, the firm that bought Blyvoor out of liquidation, gets kicked off the property and then wins it back

The men accused of plundering the Pamodzi gold mines this week ­regained control of another liquidated gold mine after giving the provisional liquidators a bloody nose in court.

Goldrich Holdings, a company co-run by one of the directors of Aurora Empowerment Systems, and ­involving the same consultant, ­successfully bid to buy the Blyvooruitzicht mine out of liquidation in December.

It was kicked off the mine last Friday by the provisional liquidators after allegedly falling short on agreed payments.

This week, Goldrich successfully challenged that “eviction” and now plans to take on the liquidators ­because it disagrees on the interpretation of the sale agreement. The liquidators say Goldrich owes a lot more money than it claims it agreed to.

The lawyer acting for both Goldrich and Aurora, David Swartz of law firm Phillip Silver & ­Associates, told City Press it has been given possession of Blyvoor and will try to reach a settlement with the liquidators.

In the application to cancel the eviction, Goldrich’s sole registered director, Bonginkosi Mthethwa, alleged that R4?million worth of gold-bearing material was stolen from Blyvoor’s stores at the weekend – right after Goldrich was booted out along with its security personnel.

“Equipment worth millions” ­allegedly also disappeared.

According to Leigh Roering, one of the provisional liquidators of Blyvoor, Goldrich should have paid R11.4?million by now in a scheme of tranches ultimately totalling R70?million.

Instead, it has paid R4.5?million and insists that a proper interpretation of the sales agreement makes that the correct sum.

“The liquidators took the law into their own hands” when they barred Goldrich from the mine, Swartz said. If there is no settlement around what Goldrich is actually supposed to pay for the mine, that will proceed to court, he said.

According to Swartz, Goldrich can only be evicted when a court finally rules it is not performing its financial obligations.

In the application, Mthethwa also said 380 miners have been ­employed by Goldrich and that the liquidators’ action could result in unrest.

Red flags were raised over the past two weeks as the links between Goldrich and Aurora emerged. An anonymous whistle-blower sent various allegations of Pamodzi-style asset stripping to different media organisations.

Another source on the mine also alleges that scrap is already being “carted off”.

But Roering insists the liquidators only cancelled the agreement with Goldrich because of the underpayment. There is “no indication” of asset stripping, he said.

The provisional liquidators were aware of Goldrich’s links to Aurora, but that was no basis to refuse its offer for the mine in November last year.

This week, Roering still defended the decision to sell the mine to Goldrich Holdings.

The asset is worth more today than it was four months ago, Roering said, praising Goldrich’s work

in repairing some of the damage caused by illegal miners since the initial liquidation in August.

“The asset is intact,” he told City Press.

According to Roering, there may very well be scrap from defunct shafts that could legitimately be ­removed. Goldrich was initially given ­access for “security purposes”, specifically to evict the illegal miners who reportedly descended on Blyvoor after the liquidation.

In September, Eskom gave notice that the power supply would be cut off by the end of November, giving the liquidators a deadline to find a buyer.

Goldrich was one of four bidders, but Roering said none of them could meet the liquidators’ initial demand for a large upfront cash payment.

Then came the Eskom ultimatum, forcing the liquidators to offer the mine to whichever company could manage to “sort out Eskom”.

The only bidder able to do so was Goldrich, although Roering did not know if it paid off the arrears. ­Eskom would not comment on the status of power supply to Blyvoor.

At first, the liquidators “had no idea” who Goldrich was, but figured it out before entering into the agreement. The company was represented by Mthethwa, its CEO; Aurora director Thulani Ngubane; and Fazel Bhana, the Aurora consultant who was later fingered as the brains behind Aurora.

The agreement was signed by Ngubane on Goldrich’s behalf.

Mthethwa and Ngubane have been associates for a long time and have co-owned and co-directed a number of companies in the past, according to company records.

Suliman Bhana, Fazel’s father and co-adviser to Aurora, has allegedly been spotted on the site but was apparently not involved in any negotiations.

Roering admitted it did raise alarm bells, but Ngubane apparently managed to placate the liquidators.

“Nobody was ever prosecuted at Aurora,” he said.

The mine’s debt is close to R800?million, and mining company Village Main Reef is the largest creditor. It was liquidated halfway through a Village takeover when economic conditions rendered it unviable.

According to Roering, the odds of getting a “mainstream mine” offering to take over Blyvoor and actually continuing with underground mining was virtually nil.

In its last full operational quarter up to June last year, the mine was realising costs of R674?377 per kilogram of gold recovered – well north of the gold price, which has been hovering at about R430?000 per kg this year.

Blyvoor consists of a sprawling 4?000 hectare site with six shafts, two villages and mountains of mine waste accumulated since the early 1940s.

Shafts 1, 2 and 3 are essentially long dead scrap metal, and shafts 4 and 6 are being used by AngloGold Ashanti to pump out water that would otherwise spill over into its neighbouring mines. Shaft 5 is the one that could still be mined.

Goldrich and Aurora

Goldrich, like Aurora, has Fazel Bhana as a consultant and Thulani Ngubane as a director.

The provisional liquidators of Pamodzi are still trying to claim millions from the Aurora directors, including President Jacob Zuma’s nephew, Khulubuse; Nelson Mandela’s grandson, Zondwa Mandela; Ngubane; as well as father-and-son consultant team Suliman and Fazel Bhana.

The claim against the Aurora directors amounts to roughly R800?million, although the number is provisional. The first court application against them revolves around holding them individually responsible for the damage.

The Bhanas and eight of their relations and friends are being separately pursued for R30?million by the liquidators of Aurora.

The money was paid out to them after they made “loans” to Aurora and may have been funded with money made out of the alleged plundering of the mines.

These cases have been brought together and will in all likelihood reach the North Gauteng High Court later this year.

This follows the court ruling against the Aurora directors and the Bhanas last year, when they claimed surety of R1?million in relation to each application.

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