|
False dawn for deals
|
|
|
Charlotte Mathews
Financial Mail
Friday, April 30, 2010
|
|
|
|
Aurora Empowerment Systems earned a ringing vote of no confidence last week when about 400 workers at DRDGold’s Blyvooruitzicht mine toyi-toyi’ed to make the point that they did not want to be bought by the black investment group.
DRDGold CEO Niel Pretorius says the original agreement to sell the group’s 60% of Blyvoor to Aurora has now lapsed and Blyvoor has traded out of judicial management.
If Aurora wishes to take up that stake, it has to make an offer acceptable to the company and its workers.
“It is both a financial requirement and a requirement generally on what sort of employer they will be in the long term.”
Aurora’s reputation has suffered in the past six months because it has repeatedly broken its promises to pay workers and vendors of assets.
Last September the liquidators of Pamodzi Gold’s Orkney mine accepted a R215m offer from Aurora and in October its offer of R390m for the Grootvlei mine was accepted.
The company, whose CEO is Nelson Mandela’s grandson Zondwa Mandela and whose chairman is President Jacob Zuma’s nephew Khulubuse Zuma, was backed by Malaysian group AM Equity, which provided guarantees for the funding. But those guarantees have never been honoured.
Though all 4500 workers were re-employed at the mines when Aurora took over management, wage payments have been intermittent. At the end of last week, some of the February wages were still outstanding and nothing had been paid for March, National Union of Mineworkers spokesman Lesiba Seshoka confirms.
He says the union has no idea when or whether a payment will be made. Workers spent the Easter weekend at Grootvlei and Orkney without water or food.
The debacle has raised the suspicion that the names of Zuma and Mandela influenced the choice of Aurora over better-funded and more experienced bidders for the mines.
Seshoka says the NUM didn’t want the mines taken over by a company with no mining or management experience.
Liquidator Enver Motala insists Aurora has the support of Pamodzi Gold’s liquidators and major creditors, Bayerische Hypo-und Vereinsbank (HVB) and the Industrial Development Corp. “Their empowerment structures are impressive and their social and labour plans are detailed, so if they get the funding the people around the mines will benefit,” he says.
“They had good intentions but no experience, and should have re-employed workers on a phased basis. By taking on all employees at once they experienced a temporary cash crisis.”
Aurora has now been given a deadline of April 30 by the liquidators to come up with the funding it needs, and they are lining up alternative buyers in case it doesn’t.
Aurora spokesman Sheshile Ngubane says another backer has been secured . About R800m is being sought, of which R590m would be to settle the purchases and the remainder for working capital.
One of the other worrying features about Aurora is the history of its advisers, Solly and Fazel Bhana.
The Bhana family took over Amlac, a JSE-listed petroleum products company, two years before it went into liquidation in 2002.
In October 2002 Mohamed Sa-Eed Bhana, Fazel Bhana and three others were fined R12,2m by the Financial Services Board for insider trading in Amlac shares, though there was no admission of guilt.
Ngubane says he was made aware of this history after the Bhanas were taken on as advisers but he did not consider it needed to be disclosed or that it precluded dealing with them. He angrily rejects the question of whether Zuma and Mandela were taken on as “fronts” for the Bhanas. He approached Zuma and Mandela himself when he formed Aurora, he says.
|
|
|
 Print this article |
 Send to a friend
|
|