‘Fake’ share certificates

2017-11-23 13:56

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Politician-turned-businessman Dr Ben Ngubane — who is accused in a court application of using fraudulent documents in a bid to strip assets in a company he owns which is now in liquidation — has never responded to the allegations.

Only his wife, Sheila, his partner in Huntrex 305 (Pty) Ltd, put up an affidavit but she too did not admit or deny the allegations.

This was said by advocate Eddie Lotz, SC, who is representing the liquidators, in argument before Acting Durban high court Judge Glenn Thatcher on Wednesday.

Ngubane is a former Eskom chairperson who has held a host of senior positions, including being premier of KwaZulu-Natal.

The liquidators appointed to wind up the company owned by Ngubane went to court after he and his wife laid personal claim to the “mineral rights” of Huntrex.

Huntrex bought Brikor’s Stanger-based quarry businesses, Natal Sand Supplies and Zululand Quarries, in 2011 for R50 million, using loans from Brikor and Ithala.

According to papers filed with the court, both agreements stipulated that Huntrex could not sell any assets until the full amounts were repaid.

But the business floundered. At one point its assets were R32 million, but its liabilities were more than R80 million and it was placed into liquidation.

It was only when a potential buyer came forward, offering R30 million essentially for the mining licences, that the Ngubanes alleged the licences belonged to them.

The liquidators alleged the share certificates they provided were “poor fabrications and “not authentic”.

They alleged they were incorrectly numbered, reflected changed values and spelling mistakes including Zululand “Querries” instead of “Quarries”.

Lotz, in his argument on Wednesday, said “a bare denial” of the allegations was not sufficient.

He said the liquidators were seeking an order that there was never a transfer of the shares and the certificates were fraudulent.

But should the court find that transfer did take place, then the liquidators’ application must still be granted because it was done illegally after the commencement of the winding-up of the company.

The hearing then took a strange turn with advocate Mike Hellens, SC, for the Ngubanes, side-stepping the fraud issue and claiming no order could be made because the minister of Mineral Rights and Energy Affairs had not agreed to the original deal between Brikor and Huntrex, as is required by law.

“This case is dead in the water.

“You cannot sell on mineral rights ... the minister has to consent to that.

“And even if the court orders that Huntrex is the lawful owner, because it is in liquidation the law says the mineral rights automatically lapse.”

While the minister was advised of the court application he was not “joined” and had only agreed to abide by the decision of the court.

Lotz responded that while he had “no argument with the legal points”, Hellens had “seen he was in trouble and moved his army one step back”.

“This point was not raised in any of the papers before. In fact, Ngubane (in a previous affidavit in a different matter) states under oath that the mineral rights were vested in Huntrex.”

He applied for an adjournment and to file a further affidavit, if need be.

This was opposed by Hellens, who said the court should dismiss the application with costs. “We have been brought here for nothing ... now they want to reopen their case because they are trapped.”

But Judge Thatcher agreed that “the answering affidavit is very, very vague — and that is a most charitable interpretation”.

He granted the adjournment, giving the liquidators permission to file further papers, and reserved costs.

Read more on:    ben ngubane  |  pietermaritzburg

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