LontohCoal reneges on coal pact

2012-04-28 11:57

Controversial mining company LontohCoal is in the news again.

This time it’s because it reneged on an agreement with Kwasa ­Mining Services to pay R1.5 million for a coal consignment it bought from a mine in Piet Retief, Mpumalanga.

Lontoh first appeared in City Press after it was accused of swindling an ambassador, a Cabinet minister and a prominent businesswoman of millions of rands.

They were SA High Commissioner to the UK Dr Zola Skweyiya and his wife, Thuthukile, Minister of Health Aaron Motsoaledi and businesswoman Wendy Luhabe.

The company’s financial records showed that Lontoh CEO and president Tshepo Kgadima had paid himself backdated salaries. Kgadima’s wife, Pheladi Mojapelo, was paid R700 000, but did not specify why she was paid this amount.

The investors told City Press they were given the impression that Lontoh owned mines in Zimbabwe, Piet Retief and North West, but the directors of the mines ­reject Lontoh’s claims.

As a result of their failure to carry out their promise, Lontoh stands to lose a coal consignment worth R8 million. This is after the company paid the initial R6.5 million down payment.

In terms of the agreement with Kwasa, Lontoh would have ­possession of the coal consignment, but ownership would follow ­only after the entire R8 million was paid.

On March 14, the South Gauteng High Court ordered LontohCoal to pay Kwasa Mining Services R1.5 million within 10 working days. However, more than a month later, Lontoh has failed to comply with the order.

Instead, it has left behind a trail of debt amounting to more than R20 million. In court documents, Kwasa Mining Services also alleges that LontohCoal owes:

» R7 million to Grindrod for coal storage;
» R12 million to businessman Neil Francis for transporting coal; and
» R1.2 million to Qhubeka Processing for washing the coal.
After receiving questions from City Press, Lontoh CEO Kgadima asked for an extra week and then submitted a 33-page response in which he questions the integrity and professionalism of the writer.

Kgadima said: “LontohCoal has a contractual agreement for transport of coal with Francis, whereby LontohCoal has contracted Francis to coordinate and manage coal transportation for LontohCoal from time to time. Lontoh does not owe Francis the alleged amount of R12 million.”

He denied the existence of the court order.

Qhubeka Processing CEO Lappies Labuschagne confirmed that Lontoh owed him R1.2 million for processing, crushing, screening and loading coal on to trucks.

In court documents, Kwasa complained that LontohCoal has been claiming on its website to own 100% of Kwasa. Lontoh in fact own no stake in the mine.

Kwasa director Aaron Ntuli ­alleged in the documents that ­Lontoh’s behaviour amounted to fraud.

“The conduct of Lontoh and Kgadima is fraudulent. They have sought to represent to the world at large that Lontoh is the owner of Kwasa Colliery, which is false.”

The court order follows an agreement Kwasa concluded in November to sell the coal to LontohCoal.

Ntuli writes that in December and January, Lontoh collected 27 000 tons of coal from Kwasa’s mine in Piet Retief and transported it to a depot at Richards Bay ­harbour.

Ntuli added that Kgadima had agreed he would pay by way of a guaranteed cheque within two days of the coal being collected from the mine.

But the bank did not honour the cheque after Lontoh withdrew ­authorisation.

When Kwasa’s lawyer, Stan Fanaroff, contacted Kgadima about the payment, he promised R6.5 million would be deposited into Fanoroff’s trust account the same day – and it was.

Kgadima was reminded that he was still required to pay a balance of R1.5 million.

In an attempt to preserve business relations, Kwasa gave Lontoh permission to take the coal from Mpumalanga to KwaZulu-Natal’s Richards Bay. However, Lontoh was not allowed to load the coal ­into a ship until the R1.5 million ­balance was settled.

This means the coal consignment was technically still owned by Kwasa until Lontoh had guaranteed payment of the balance.

With no payment forthcoming, Kwasa cancelled the deal in February and headed to court to secure the balance of payment.

Ntuli alleges in the court papers that in March 2012, Kgadima threatened Fanaroff during a ­telephone call, and “made various untrue and unfounded statements and allegations concerning Fanaroff”.

“Kgadima also telephoned Jacob Sikhosana, one of Kwasa’s directors, and suggested Kwasa fire Fanaroff because he was pursuing his own agenda,” says Ntuli.

He alleges Kgadima said: “He (Kgadima) is the only person in the whole world who can sell Kwasa’s coal.”

Said Ntuli: “Kgadima said we would regret it if we did not cooperate with him and that he would not pay any money into Fanaroff’s bank account.”

According to the court papers, the coal is still sitting at a depot ­belonging to Grinrod Terminals in Richards Bay harbour and storage fees have not been paid.

Ntuli said in the same papers that Kgadima unsuccessfully ­attempted to make Ntuli sign a sworn affidavit rubbishing the City Press exposé.

“Ntuli was contacted by Kgadima, who requested Ntuli to sign a sworn statement confirming that the version of events as related by him to the journalist in question had been completely ­misrepresented.”

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