Khulubuse Zuma, Zondwa Mandela liable for R1.7bn Aurora damages

2015-06-25 11:37

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories


North Gauteng High Court Judge Eberhard Bertelsmann has handed down a damning judgment against the directors of Aurora Empowerment Systems. 

Khulubuse Zuma, Zondwa Mandela and Thulani Ngubane will have to pay up about R1.7 billion in damages for the destruction of Aurora’s Grootvlei and Orkney mines that cost 5300 workers their jobs. 

Aurora’s financial directors and de facto controllers of the company – Solly and Fazel Bhana – were also held liable. 

A civil claim was brought by the liquidators of Pamodzi Gold in terms of section 424 of the Companies Act, asking the court to hold the directors liable for all the damage caused to the mine. 

Bertelsmann’s judgment this morning focused on the 2009 bid letters that Aurora submitted to the liquidators in which they claimed that Aurora had the funds and the experience required to take over the mines. 

Bertelsmann tore into their claims, calling them “the figment of an overactive imagination”, “devoid of factual content” and “a pipe dream”. 

The court found that the directors had lied from day one, when they placed a bid to buy the mine: “The respondents either did not appreciate the very grave implications of the offer the directors made, or did not care about the consequences that a fanciful and ill-founded approach to the transaction must have [had].” 

Initially it appeared that Zuma, who always claimed he was kept in the dark about the problems at Aurora, would be excused as Bertelsmann found that Mandela, Ngubane and the Bhanas were “guilty of wilful deception by presenting bid documents containing numerous false assertions to the liquidators. They are [also] guilty of reckless management of Aurora’s affairs”. 

Bertelsmann then turned his attention to Zuma, ruling that “his failure to act once he knew the dire state of affairs is clearly a reckless disregard of his duties as a director. If he really did not know, it is because he deliberately chose not to be informed. Such an approach constitutes recklessness ... and [Zuma] should therefore be held liable for all losses that were incurred on or after December 1 2009.” 

None of the directors were present in court to hear the judgment. 

Read more on:    khulubuse ­zuma  |  aurora empowerment systems
NEXT ON NEWS24X publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.