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Harmony faces US legal threat
Brendan Ryan
Posted: Fri, 18 Apr 2008
[miningmx.com] -- Harmony may be about to be sued in the United States by shareholders irate over losses incurred by the sharp drop in the share price in July/August when CEO Bernard Swanepoel quit.
Harmony shares had traded as high as R115 in April but eased to just over R90 by mid-July. They then plummeted to nearly R60 by the end of August in the wake of Swanepoel’s shock resignation.
The shares have since recovered to current levels around R93.
Swanepoel quit ostensibly over a R250m upward revision of quarterly costs caused by major problems with the company’s cost accounting systems which had previously understated them.
That resulted from the introduction of a new accounting system across the group’s mines at the end of 2006.
Swanepoel took responsibility for the problems and resigned even though the person directly responsible for the
implementation of the new system was financial director Nomfundo Qangule. She subsequently quit as well.
Swanepoel has since formed his own management consultancy called To The Point Growth Specialists.>
Harmony late on Friday evening put out a SENS release stating that it was, “aware that it has been named or may be named as a defendant in a lawsuit filed in the US District Court in the Southern District of New York on behalf of certain purchasers and sellers of Harmony’s American Depositary Receipts (ADRs).
“Harmony has retained legal counsel who will advise Harmony on further developments in the U.S.”
Amelia Soares, Harmony’s GM for investor relations, told Miningmx the possible lawsuit related to the implications for the Harmony share price of the revision of costs announced last year.
She added, “nothing concrete has been placed in front of us of yet. We just wanted the market to know that we were aware of this
development.”
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