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US firm to sue JCI, Kebble
Marc Hasenfuss
Posted: Tue, 06 Jan 2009
[miningmx.com] -- THE estate of the late Brett Kebble and mining house JCI look set to face damage claims from a US-based biotechnology company, according to a Globe Newswire report on Tuesday.
Hemispherx Biopharma has charged Kebble with alleged illegal manipulation of its stock "for purposes of bringing about a hostile takeover of the company".
According to the newswire report, the US Court of Appeals last week overturned a lower court's dismissal of Hemispherx Biopharma's fraud claims against a group of South African defendants. These claims related to misrepresentations made in an alleged hostile takeover attempt.
The Globe Newswire report said Hemispherx recently reached a settlement with two of the South African defendants: Bioclones (a subsidiary of empowerment group Sekunjalo) and its former CEO Cyril Donninger.
But the latest appeal court ruling means Hemispherx can pursue its damage claims against the remaining South African defendants - most notably mining investment conglomerate JCI and Kebble's estate.
Globe Newswire said the initial dismissal of fraud claims was based on an argument by the South African defendants that the Federal Arbitration Act precluded the lawsuit against them for common law fraud. But the appeals court found that the
Federal Arbitration Act did not apply.
Philadelphia-based Hemispherx, which manufactures an experimental drug called Ampligen, filed the original lawsuit in 2004. It was based on allegations that the South African defendants - led by Brett Kebble - pushed merger talks with Hemispherx in 2002 into a full-blown attempt at a hostile takeover.
Globe Newswire reported Hemispherx attorney Tom Equels as saying that Kebble (then the chairperson of JCI) "was trying to add Hemispherx to the list of public companies already pillaged by Kebble and his associates".
Equels said: "Kebble had expanded his reach into US markets and he had Hemispherx in his gunsite. Had Kebble been able to effect his attempted takeover of Hemispherx, the impact on its shareholders would have been devastating."
JCI - along with Donninger - initially controlled Bioclones, a South African-based biotechnology operation. Cape-based empowerment group Sekunjalo bought out JCI's
stake in Bioclones in mid-2006.
Sekunjalo, which now holds 49% of Bioclones, has repeatedly hinted at a listing for the biotechnology business on either the Nasdaq or Alternative Investment Market in London.
Sekunjalo commercial director Peter van Zyl confirmed Bioclones had settled with Hemispherx in 2008.
JCI, suspended from trading on the JSE in 2005, is involved in fraught merger talks with the larger Randgold & Exploration, another suspended Kebble company. R&E says it will pursue claims against JCI running from R1.7bn to R14bn because of fraudulent share transactions by the latter company during Kebble's time as CEO.
Kebble was shot dead in September 2005 in mysterious circumstances.
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