Simmers unfazed by BEE probe

Brendan Ryan | Wed, 30 Sep 2009 14:20
[miningmx.com] -- SIMMER & Jack Mines (Simmers) chairperson Nigel Brunette says he has "no issues" with the investigation by government into alleged fronting at Simmers to obtain mining rights.

South African national newspaper Business Day reported on Wednesday that the department of mineral resources was concerned about the use of empowerment firms as so-called fronts by mining companies.

Business Day also said the department was concerned about the effect the continuing dispute between Simmers and empowerment group Vulisango could have on mining empowerment.

Brunette told Miningmx: “Our empowerment partner is Vulisango which we believe to be a genuine black economic empowerment company. We would be dismayed if it turns out that Vulisango is, in fact, not properly empowered.”

Vulisango CEO Valence Watson and Brunette clashed at last week’s Simmers' annual general meeting (AGM), which took place two days after four directors associated with Vulisango resigned from the board.

Watson said the directors had been forced off the board by Brunette, who he described as “oppressive”.

Brunette replied the directors had opted to resign rather than attend a meeting he had called in terms of Section 220 of the Companies Act, at which he planned to call them to account over conflicts of interest and breaches of their fiduciary duties.

Vulisango is objecting to the dilution of its stake in Simmers yo 22% from 26% as a result of recent deals, including the issue of shares to help fund the purchase of the Tau Lekoa mine from AngloGold Ashanti.

According to Vulisango, their stake may not be diluted below 26%. Vulisango also claims it must have a majority of directors on the board as well as a management contract for Simmers to meet its black economic empowerment obligations and retain its mining rights.

Brunette has rejected that. He told the AGM that Simmers had obtained legal opinion from three senior counsel that it did not need to meet these requirements.

He told Miningmx: “We are well ahead of the requirements for empowerment in terms of the mining legislation.”

The writer owns shares in Simmers.