Union calls for mining company in liquidation to be rescued

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Central Rand Gold land outside Johannesburg. Foto: Felix Dlangamandla
Central Rand Gold land outside Johannesburg. Foto: Felix Dlangamandla

The majority union at the troubled mining company Central Rand Gold SA has applied for the firm, which is already under liquidation, to be put under business rescue instead.

The Building Allied Mining and Construction Workers’ Union, which represents 75 of the 120 company’s employees, has applied to the Johannesburg High Court for an order that the company be placed under business rescue.

According to the application the union filed earlier this month, the union was allegedly not properly informed of the decision to liquidate the company.

It was placed under liquidation two months ago after two creditors, including the City of Joburg, approached the court.

At the time, the court appointed a provisional liquidator, Icon Insolvency Practitioners.

However, at the first meeting of creditors last month, the company was voted out and new co-liquidators, Johannes du Plessis and Norman Jacobs, were appointed.

At the first meeting of creditors held by the new liquidators last week in Roodepoort, Johannesburg, the proven creditors were briefed about the court challenge.

According to a well-placed union source, as well as one of the creditors, the union claims the company’s debt amounts to more than R180 million, while the proved claims at the meeting of creditors totalled less than R30 million.

Zolile Smous, the secretary-general of the union, declined to comment and said he would only speak about on the issue once the court had dealt with it.

Central Rand Gold SA chief executive Dominique van Wyk declined to comment on the matter.

Thabo Padi, the lawyer for the City of Joburg, which is owed more than R18 million, confirmed he had been mandated by his client to oppose the union’s application. Questions sent to the new liquidators were not responded to.

Meanwhile, the company has allegedly kept its holding company, previously listed on the London Stock Exchange, in the dark about its financial woes.

The company, UK-based Central Rand Gold Limited, wholly owns CRG Netherlands Antilles, which, in turn, owns 74% of Central Rand Gold SA, but it is unclear if it still holds this stake after the company was bailed out by Chinese investors a few years ago.

According to some of the shareholders City Press spoke to, Central Rand Gold Limited, which City Press has also tried to get hold of, has remained mum on the financial state of the local company. Several of the shareholders who made contact with City Press said they found out about the liquidation for the first time when they read about it in this publication.

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