  | |
| |
 |
|
| ||
|
R&E issues a slew of claims as JCI talks fail Posted: Tue, 26 Aug 2008 [miningmx.com] -- SUSPENDED mining investment group Randgold & Exploration has issued a slew of claims against those it alleges have defrauded it or benefited from that fraud as talks with sister company JCI to settle claims worth billions of rands fail and they head into arbitration. One of the intriguing developments in the saga is that now former R&E CEO Peter Gray, who recently quit his position in the company to focus on his other chief executive position at JCI, is one of those against whom a claim has been lodged. R&E and JCI had agreed to set aside merger plans and agreed a memorandum of understanding to reach a settlement agreement on 22 July as a way to avoid costly and time consuming litigation or arbitration. The extended deadline has passed and no resolution has been achieved. "R&E advises shareholders that the companies have not been able to achieve the settlement agreement...," R&E said in a statement. The breakdown came largely over a disagreement over JCI's demands that it be idemnified against any other claims outside those brought by R&E. "Furthermore, R&E and JCI have not been able to execute the proposed merger as contemplated in the joint SENS announcement of 23 April 2007 and consequently, the merger having failed, the dispute between the companies will now be referred to arbitration." The two parties have to select an arbiter and agree to abide by the ruling made by that person, with the option for an appeal. The arbitration process is seen as a quicker and cheaper way of reaching a settlement than going to court. R&E has 15 claims against JCI, with the total value rising to R14bn, accounting for the highest price the shares held by R&E and which were sold without its permission, reached between their alleged theft and 31 March 2008. R&E has a range of alternative claims, with the lowest being R1.77bn, based on the monies JCI received from the share sales. The shares R&E says were sold by JCI include 26.6 million London-traded Randgold Resources shares and JSE-traded DRD Gold, Simmer & Jack and 8.1 million Aflease Gold shares. R&E says these were sold by JCI to fund its liabilities, ongoing operations and maintain financial stability. R&E and JCI were both led by Brett Kebble, who was forced to step down in August 2005. He was shot dead under mysterious circumstances in September of that year. The most high profile summons R&E has issued is the one against a Gold Fields' subsidiary, which used to be the old Western Areas, a company that Gold Fields bought for its 50% stake in the South Deep gold mine. Western Areas is alleged to have benefited by R520m from irregular sales of shares by JCI. The claim rises to R11bn if the highest value of those sold shares is taken into account. Gold Fields has said it will defend the summons. The surprise is the claim against Peter Gray, who was appointed chief executive after Kebble was forced off the board. Gray was paid R2.8m made up in equal parts of salary and bonus during the year to end-February 2008. He was paid a signing-on incentive of R2.6m in 2005. The R80m claim against Gray is an alternative to the R648m claim against stock brokers Tlotlisa Securities (T-Sec), Tlotlisa Holdings and associated parties, including Gray and Leonard Steenkamp. T-Sec was the brokerage that Kebble and other directors utilised to The claim is related to the time when Gray served as chairman of T-Sec, which was the institution through which JCI sold the misappropriated shares and then reinvested the funds. Details of the summons will only be made public once those upon whom summons have been issued have responded. In Tuesday's statement, R&E said it and Randgold Resources have issued summons against Bookmark, Sello Rasethaba and John Chris Lamprecht in a R3.3bn claim, which represents the value of 7.7million Randgold Resources shares. There are a number of alternative claims. There is a second set of 16 claims totalling R12.5bn against the former directors of R&E and First Wesgold Mining, which was a wholly owned R&E subsidiary that held three million DRD shares, and again, there are a number of alternative claims. R&E has issued summons against Charles Orbach, claiming a total amount of R2.8bn. There is also a summons issued against Societe Generale's Johannesburg branch for R658m. There are a number of other summons, including Investec Bank for R271m, and Tlotlisa Securities. "Shareholders are cautioned that the above claims and those included in the update to shareholders of 24 July 2008 are yet to be proven in a court of law and the board can not with any degree of certainty predict the outcome of the subsequent litigation," R&E said. "Furthermore, such recoveries as may be made against one party could result in the adjustment of the amounts claimed against another party," it said. These are, by and large, the bulk of the summonses.
| ||||
0% 
