Lontoh Coal blows investors’ millions

2012-02-18 13:28

A controversial coal company splashed money invested by potential shareholders – including top politicians and business people – on charter flights, hotels and office rental, lawyers and interior designers.

Lontoh Coal also used money invested by, among others, SA High Commissioner to the UK Dr Zola Skweyiya and his wife, Thuthukile, Health Minister Aaron Motsoaledi and businesswoman Wendy Luhabe, to pay its president and chief executive, Tshepo Kgadima, for backdated salaries.

Kgadima’s wife, Pheladi Mojapelo, also benefited from her husband company’s largesse.

This week, Kgadima did not answer questions sent to him, but responded in a one-sentence email saying: “We will reply to your email at the same time we release a comprehensive media pack on all the characters in your mission to all stakeholders.”

Lontoh Coal’s financial records, seen by City Press, indicated that soon after investments were paid into the company’s bank accounts, the money was moved to pay expenses, apparently without the knowledge of the investors.

Three weeks ago, City Press reported how Lontoh Coal lured investors with the promise of investing their money in mining operations in South Africa and Zimbabwe. It also claimed that it was going to list on the JSE and would become the first African company to list on the Hong Kong Stock Exchange.

Instead, Lontoh Coal never listed on either of the exchanges and kept on postponing the the listing dates.

The records shows that Thuthukile Skweyiya deposited R1.6 million into Lontoh Coal’s bank account on November 24 2010. Within days money was transferred out of the account for other transactions including:

» R300 000 to PP Mojapelo;
» R200 000 for attorneys;
» R90 000 to Fly Jetstream Aviation; and
» A R10 000 donation to Alleluia Ministries

Fly Jet Stream Aviation confirmed that Lontoh had paid R167 000 to charter flights to several destinations, including Zimbabwe.

Dr Nkululeko Skweyiya – who also invested R2 million into the scheme and is a nephew of the UK ambassador and his wife – said they had no clue that the money was used for anything other than investments into mining operations.

After Lontoh Coal’s account was depleted in December 2010, another flood of investors poured money into the bank accounts. This was used to pay Kgadima a R150 000 salary, R50 000 to MK Interior Design and rental for a Harare office (Zimbabwe) for R30 000.

On March 1 last year, another investor deposited R1.6 million into Lontoh Coal and by the second day 23 transactions, including a backdated salary of R310 000 for Kgadima, were conducted on the account.

On March 3, another investment of R2.2 million came into the account and immediately a transfer of R700 000 was made to Mojapelo. Kgadima was also paid R115 000, while other payments were made to Manor House Furniture (R25 000), World News Media Group (R300 000), flights and Hotel Hong Kong (R100 000).
Sello Lediga – who invested in Lontoh in 2009 – said the shareholders in Polokwane held a meeting three weeks ago where Kgadima explained the financials of the company. “I went through the contracts of the all the mines Lontoh owned and I was satisfied that Lontoh owned the stakes in the companies,” he said.
“Your continued pursuance of the story is not in the best interest of my investment in the company,” said Lediga.

He, however, added: “If Kgadima is doing anything wrong, he must go to jail.”

Three weeks ago, City Press wrote that a list of Lontoh Coal’s investors showed that 90 people had invested at least R11 million into the company. Kgadima this week disclosed that the company had 240 investors. More people invested an additional R5.4 million between October 2010 and July 2011.

Lontoh investor Thembi Tulwana was shocked about where her money had gone: “I was told that my investment would be invested in companies owned by Lontoh.”

Lontoh Coal told its potential investors that it owned stakes in several mining companies across the country and Zimbabwe. But directors of Kwasa mine, based in Mpumalanga’s Piet Retief and Zimbabwe’s Liberation mine denied that Lontoh owned a stake in their mines.

Lontoh also claimed to own Hlobane View Colliery, in Vryheid, North West. This week Andre Theron, the director of Proxor, disputed that Lontoh Coal owned Hlobane View.

Theron said his firm and Lontoh had on March 16, 2010 signed an option agreement which gave Lontoh the sole and exclusive right and option to acquire a 100% stake in Proxor for R30 million. However, the deal collapsed after Lontoh only managed to pay a non-refundable R150 000 to Proxor and failed to raise the remainder.

Theron said Proxor initially wanted to take legal steps for breach of contract but decided against this as legal costs would be expensive.

Kgadima said Skweyiya – nephew to the politician – was disgruntled because he was Lontoh’s ex-employee who had been fired for incompetence.

In a later email on Friday, Kgadima questioned how the City Press reporter was allowed to use his privileged position as a journalist “to carry out attacks on our company on behalf of individuals with a declared personal vendetta against me and the company”.

He said he was out of the country and would not be able to respond on time.
City Press first spoke to Kgadima on Wednesday and set up an appointment to interview him on Thursday.
He said he was a participating as a speaker at an international conference.

“However, be assured that our team is looking at all aspects of the issues as raised and we will respond fully through appropriate media platforms available to any and all free SA citizens, before your story is published.

Mojapelo said: “I have no comment. I understand that you have spoken to Tshepo and I will not comment.”

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