Zondwa Mandela, Thulani Ngubane and the Bhana family are the next targets for liquidators of collapsed mining company Aurora Empowerment Systems.
Tomorrow, the liquidators are filing several sequestration applications against those mentioned above in a bid to recover money as part of a seven-year dispute.
This week, former Aurora director Khulubuse Zuma agreed to pay a R23 million settlement as a share for his role in the saga.
The settlement that the president’s nephew signed with Aurora’s liquidators is set to become an order of the court on October 25.
According to John Walker, the attorney for the liquidators of Aurora, a slew of sequestration applications would be filed on Monday, with other individuals still to be targeted.
- A sequestration application will be filed against Zondwa Mandela, grandson of the late former president Nelson Mandela, and Thulani Ngubane. Both were Zuma’s co-directors at Aurora. This will be to the tune of only R4 million, even though they are jointly liable for the same astronomical debt Zuma faces. The reason is that they are challenging the claims and have not entered into a settlement agreement. Instead, the liquidators are pursuing them for the costs of the legal actions to date.
- The liquidators have already been granted a sequestration order to sell the assets of four members of the Bhana family – husband and wife Solly and Zubeida Bhana, their son Fazel as well as Yaseem Theba, Solly and Zubeida’s son-in-law.
The Bhanas were alleged to have been in control of Aurora during its ill-fated takeover of the gold mines of Pamodzi Gold – which was provisionally liquidated in 2009 – but had failed to raise funds to pay for them.
The Master of the High Court will appoint a trustee to sell their assets to raise the R8.5 million they owe in terms of a judgment against them last year.
The money is related to “investments” they made into Aurora which were rapidly repaid with interest, even though the company was insolvent and they were not preferred creditors.
The Bhanas had previously also settled by offering to pay R5.9 million instead, but according to Walker, they failed to honour the agreement.
- Another sequestration application will be filed against the assets of Fazel’s sisters, Feroza Bhana and Shamila Essay, related to the same money. The two sisters owe relatively small amounts – altogether about R1.1 million – in their personal capacity, but had stood surety for the rest of their family’s R5.9 million debt, said Walker.
- Controversial former liquidator Enver Motala – whose real name is apparently Enver Dawood – will still be pursued for R3 million, although nothing is in court yet.
According to the agreement reached with Zuma, he told the liquidators that “the net value of his assets do not exceed R23 million”.
In terms of the agreement, he still had to submit a confidential disclosure of all his assets and liabilities to prove that this was, in fact, the extent of his wealth.
Zuma will pay the amount in instalments over a number of years, but it seems certain that he will ultimately contribute most of the money that gets recovered to pay creditors, including about 5 000 former workers who are owed back wages.
But the settlement with Zuma represents about half of the money that the liquidators and lawyers involved in the Aurora saga realistically expect to collect years after the company’s short and disastrous control over the mines of provisionally liquidated Pamodzi Gold in 2009 and 2010.
It is a minute fraction of the claims that exist against Aurora and directly against its former directors. Aurora’s headline-grabbing debt of about R1.8 billion was always academic, with no real prospect of that amount ever being recovered.
The figure stems from the estimated loss of gold, but also the replacement cost of mine shaft infrastructure that was stripped and sold as scrap.
In total, about R50 million might conceivably be recovered, said Walker.
The deal with Zuma is unlikely to lead to any immediate payouts to creditors.
“All the money needs to be collected first before a liquidation distribution account is set up,” said Aurora liquidator Gert de Wet.
The ex-workers rank as preferred creditors for about R14 million, with the SA Revenue Service likely to receive some small payment at an as yet undetermined time.