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Peter Gray, CEO, Randgold & Exploration and JCI
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» JCI to submit R3bn merger plan in days
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» JCI/R&E would make money if not under attack - Peter Gray, CEO
» JCI may land on its feet
» Murk of JCI, R&E starts to clear

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'My wicked challenge': JCI's Gray
Peter Gray
Posted: Mon, 15 Oct 2007

[miningmx.com] -- WHEN in 2005 I was invited to serve as CEO of both JCI and Randgold & Exploration (R&E), I had been contemplating the prospect of retirement. After a long career in merchant banking, I had planned to take on a few directorships, neatly balanced against time spent travelling and cycling.

I was under the impression that the core task was to get the accounts audited and published. I realised this would be not be easy but was happy to postpone my retirement for six months or so.

Some two years later the accounts are still unpublished and the respective executive teams under my leadership are confronted with a raft of wicked challenges. My bicycle is gathering dust and the prospect of touring remains somewhat remote!

I, together with the team members, become frustrated with the delays in finalising matters but sorting out the regulatory processes previously ignored and new ones are just not able to be “fast tracked”. With the ongoing investigations we feel that the hole just gets bigger and bigger as they discover more misdemeanours.

The new boards appointed in August 2005 quickly found that the affairs of both companies were hopelessly intermingled through a “treasury service” called CMMS. Two forensic reports confirmed that shareholders had been subjected to larceny and fraud on a grand scale.

Closer to home, it became clear that many of the transactions processed by stock broker T-Sec and other firms were based on fraudulent documentation submitted by officers of JCI and R&E. As I had helped to set up T-Sec as an empowerment venture, I urged the forensic team to pay special attention to these matters. I also welcomed the involvement of the Scorpions at an early stage of the investigation. The fact that I continue to serve as CEO at both companies speaks for itself.

Because of some of the not-so-subtle murmurings in the media, I recently subjected myself to the ultimate test of shareholder approval at general meetings of R&E. I am grateful for the overwhelming confidence and support of shareholders.

In due course, the boards of both JCI and R&E recommended that the companies should be merged to extinguish an inter company claim that would otherwise take many years to resolve through the courts.

Should the merger proposal be voted down, the matter would go to arbitration, in which case it is likely that JCI would have to be liquidated. Were this to happen, I would consider myself conflicted because of the deep insights I have gained into the affairs of both companies. I would then stand down from both boards.

I think it is fair to say that the new board have done shareholders proud over the past 24 tumultuous months. When Brett Kebble stood down, both companies were on the verge of liquidation. Since then, the businesses have been stabilised, millions of stolen funds recovered and numerous subsidiaries returned to profitability.

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One of our biggest challenges is to balance the public’s “right to know” with the need to maintain confidentiality in our bid to recover more funds and ensure that the bad guys get their day in court. Often the decision whether or not to release information is not ours to make.

Shareholders should also be comforted that all information uncovered including the full details of the forensic investigation are in the hands of the authorities.

Notwithstanding the slings and arrows of impatient shareholders and sometimes grumpy commentators, I think the directors and very small teams at JCI and R&E have done shareholders proud showing 24 hour commitment seven days a week.

Peter Gray is a merchant banker and before taking on the joint position of CEO of Randgold & Exploration and JCI had stints as head of both Société Générale SA and of Tlotlisa Securities (T-Sec).