Simmers foils Vulisango plan

Brendan Ryan | Fri, 27 Nov 2009 17:58
[miningmx.com] -- BLACK empowerment company Vulisango has been stymied in its attempt to call an extraordinary general meeting of Simmer and Jack (Simmers) shareholders at which it intended removing CEO Gordon Millerand chairman Nigel Brunette from the board.

Vulisango’s 22% stake in Simmers is held through subsidiary Xelexwa Investment Holdings, which is in provisional liquidation.

In a further development another joint liquidator - Enver Motala, who was one of the joint liquidators for Pamodzi Gold - has been appointed to join the two current Xelexwa liquidators Sean Johnson and Lambertus Bester.

Vulisango wrote to the Simmers board on November 13 calling for the meeting to be held.

Simmers indicated on November 26 that it had launched a High Court application seeking to stop Xelexwa Investment Holdings and its joint provisional liquidators from convening a meeting to remove the directors.

Simmers announced on Friday that the joint liquidators of Xelexwa had withdrawn the application for the extraordinary general meeting.

Neither Brunette nor Watson could be reached for comment on Friday afternoon. It’s understood they were in a meeting trying to thrash out a solution to the differences between the two sides.

According to a Stock Exchange News Service (Sens) statement released by Simmers on November 24, “ Simmers is seeking clarity from the court as to the legal authority of the Xelexwa liquidators to requisition the general meeting.

“The fact of Xelexwa’s liquidation raises concerns about the status of Xelexwa’s holding company – Vulisango Holdings.

“Simmers believes that it is in the interests of shareholders that there is clarity and transparency around the parties and entities who are seeking to gain control of the Simmers board of directors, more so as this relates to the actions and obligations of parties who may be acting in concert to give effect to this change of control at Simmers board level.”

It is understood that Xelexwa was put into liquidation by Vulisango as a stratagem in its legal dispute with JCI to reduce the payment terms for the shares in Simmers that Vulisango originally acquired from JCI.

The move has backfired on Vulisango, to the extent that it no longer has direct control over the Simmers shares.

Brunette has long maintained the problems with Vulisango at Simmers board level result from Vulisango’s dispute with JCI and are a completely separate issue from the running of Simmers.

Watson has accused Brunette and Miller of siding with JCI against Vulisango.

Motala told Miningmx he was appointed joint liquidator by the High Court following a hearing earlier in November, at which JCI opposed the final liquidation of Xelexwa.

He said: “The parties agreed that the final liquidation order against Xelexwa should be set aside and the company should return to being in provisional liquidation.

“That being the situation, a new file had to be opened and new liquidators appointed. I was appointed to join the existing joint liquidators.

“This has been a very acrimonious fight and the matter cries out for an independent investigation. My intention is to see if it can be resolved amicably but, of course, the liquidators have to act jointly.

“There is too much at stake for all the parties concerned. It is very early days and I am still going through all the papers before the first meeting with the other liquidators.”

Also announced on Friday was that yet another director – RMB executive Martin Oberholster - had resigned from the Simmers board.

According to Brunette, Oberholster resigned because he “believed that the uncertainties brought about by the resignations of certain Simmers directors, followed by an attempt by Vulisango to call a general meeting in order to impose a different board of directors, has exacerbated an inherent conflict of interests for him.

“This conflict was brought about by his position as an employee of Rand Merchant Bank (a material shareholder of Simmers) on the one hand, and as a director of Simmers representing all shareholders on the other.”

Oberholster could not be reached for comment. The decision taken by RMB on who to support - the existing board or Vulisango’s proposed new board – would be pivotal if Vulisango eventually succeeded in calling the shareholders’ meeting.

Vulisango would probably win with RMB behind it, and almost certainly lose without its support.

Up until now it appears that RMB has supported the existing board. Brunette has close links with RMB, where he was a senior executive in the mid-1990s.

It is not clear whether Oberholster’s decision to step down indicates a change in attitude by RMB.

The writer owns shares in Simmers.