Ah, nepotism and political connections – how far they can get you. Especially if you’re Khulubuse Zuma. Like father like son they say (or in this case, like uncle like nephew). Zuma is the nephew of our president, Jacob Zuma, and both of them share qualities that have managed to get them pretty far (if you consider corruption and greed as qualities, of course). In 2014, Khulubuse allegedly obtained an oil fortune in the DRC worth R100 billion thanks to the help of his uncle. And this year, he’s been in the news again – this time dominating the headlines of the Aurora Empowerment Systems and Pamodzi Gold debacle. In the following opinion piece, Gideon du Plessis asks a rather apt question considering the state of our corrupt government: Just how guilty does one have to be to be found guilty when one has political connections? du Plessis writes a superb piece about the extensive damage Aurora has caused – especially to the workers, who were paid absolute pittance whilst fat cats remained at the helm reaping in the benefits. And that’s the fundamental problem of our South African society, isn’t it? Those in power take all they can without a single thought for those really suffering. – Tracey Ruff
*By Gideon du Plessis
Listening to the legal teams of the Pamodzi liquidators, Solidarity and Aurora Empowerment Systems presenting argument in the North Gauteng High Court last week, I asked myself just how guilty one has to be to be found guilty when one has political connections.
The Aurora debacle must certainly be the largest fraud saga that has hit South Africa since 1994. After a two year long battle, a court application has finally been heard this week against the Aurora directors – including Khulubuse Zuma, President Zuma’s nephew; Zondwa Mandela, grandson of Nelson and Winnie Mandela; the controversial Fazel and Solly Bhana having close ties to Winnie Mandela and Thulani Ngubani. Michael Hulley, President Zuma’s lawyer and former Aurora director, has been excluded from the legal process for now but his day in court will come.
The Aurora directors have been charged under section 424 of the Companies Act of fraud and the reckless management of the Pamodzi Mines. The court application focuses on the damage amounting to around R1,5 billion caused to the mines while under their control; revenue of R122m earned from gold sales that subsequently disappeared without a trace; and R35m that was allegedly borrowed to Aurora by friends and family members of the Bhanas and that was repaid at an interest rate of 100%, as well as outstanding salaries for a period of about eight months being owed to 5 300 Aurora employees. Ultimately, the application seeks conviction of the directors in their personal capacity and should they fail to pay their debts their assets have to be seized, the proceeds of which are to be used to pay the workers.
Court proceedings focused on only a small part of the plundering of Aurora and exclude among others the following matters, which will be the subject of separate lawsuits: pension and unemployment insurance contributions which were deducted from salaries and subsequently stolen; Aurora’s non-registration with the Unemployment Insurance Fund, the Compensation Commissioner and the South African Revenue Services (SARS); perjury; the discharge of acid mine water into the Blesbokspruit; fraud amounting to R5,3 million related to the purchase of shares; and R12m stolen from an investor, to name but a few.
Nepotism and political connections can get you far in SA. Just look at Khulubuse Zuma.
For the sake of background, the sequence of events is briefly outlined as follows: In October 2009 the Pamodzi liquidators appointed Aurora to manage the Grootvlei and Orkney mines. By December 2009, they would have received a sum of around R600m from an “investor” to purchase the mines. During negotiations to purchase the mines, the Aurora directors indicated that, among others, they had acquired two companies in the timber industry, had piles of cash and that they had the back-up of a major Malaysian investor. Aurora took over the 5 300 miners and mining continued.
After three months, Aurora had earned R122m from gold sales but, as mentioned, the revenue disappeared. By December 2009, there was no sign of the mysterious Malaysian investor’s money and it came to light that almost none of the service providers had been paid during the first three months of the Aurora directors’ tenure – among those count Eskom and municipal bills – no taxes were paid to SARS and workers had only received a small part of their salaries since December.
This pattern of non-payment continued and workers only received a fraction of their salaries during the period January to the end of March 2010. By the end of March, workers started protesting and on 1 April 2010, the mines were placed under care and maintenance. As from 1 April, Aurora retained the services of only around 500 of the 5 300 employees and continued mining in a primitive and dangerous way, but no salary arrears were paid and those who continued to work were only occasionally paid a pittance. Under Aurora’s control, mining assets that did not belong to Aurora were stripped and sold as equipment or scrap. After a year, the various shafts were stripped to the bottom and every single law that applied was contravened.
Notwithstanding the damning evidence given against the Aurora directors in court last week, they shamelessly insisted that they had done nothing wrong and that they could not be held liable for anything. This while their 5 300 employees and their dependents of around 42 000 lost almost everything – from their possessions to their human dignity and, ultimately, their confidence in the South African legal system too. Fortunately, Solidarity Helping Hand could support them by distributing food hampers among other things.
Why was this allowed to happen? Apart from the combination of a bunch of dishonest and unethical people with political connections, a controversial liquidator was in their midst to boot. In numerous talks with members of the Portfolio Committee on Mineral Resources, SARS and officials of the relevant government departments were appalled by the human tragedy and the lawlessness that had taken place, but there wasn’t much they could do. People who are higher up on the political ladder tried to impose silence on Aurora’s critics by arguing that Aurora is a black economic empowerment group with a great deal of potential, and the race card was often played, thus keeping critics at bay. Moreover, so many legal dossiers opened against Aurora disappeared, have not been enforced and no progress was being made with regard to many other legal actions instituted against the Aurora directors. It could thus be assumed that their political connections have made the villains untouchable.
We place our hope in the highly respected Judge Eberhard Bertelsmann, who last week heard the application against the Aurora directors, to give a powerful ruling that would restore the lives and confidence in the legal system of the 5 300 workers and their families and that would meet out severe punishment for the Aurora directors for their unscrupulous deeds.
*Gideon du Plessis is the General Secretary of Solidarity