[miningmx.com] — Two trade unions are seeking urgent answers after the liquidators handling the Pamodzi Gold liquidation were paid more than R40m in a highly controversial transaction.
At the heart of the dispute is the sale of Pamodzi’s Free State mines to Harmony Gold. The question is whether this should be classified as the sale of a fixed asset, netting the liquidators 3% in commission, or whether it should be classified as a sale of a going concern, for which they could collect 10%.
Controversial liquidator Enver Motala and his colleagues claimed payment for the sale of going concerns, thus pocketing R30m more than they would have received had the situation been otherwise.
Harmony Gold this week confirmed that it had not bought a going concern.
The National Union of Mineworkers, NUM, was shocked to hear of this last week.
The union had been unaware that the account had already been lodged, and even less that it had been settled.
A look at the accounts confirms the suspicion that the liquidators were set on enriching themselves, said NUM spokesperson Lesiba Seshoka.
The first liquidation and distribution account in the protracted Pamodzi saga was lodged quietly with the Master of the North Gauteng High Court in Pretoria during the December holiday period.
PREFERENTIAL TREATMENT
Last week observers said that the liquidators’ accounts showed that they had claimed for the sale of the mines as going concerns or movable property, rather than as fixed assets or immovable property.
The Insolvency Act (24 of 1936) prescribes a tariff of 3% of the gross proceeds from fixed property and 10% of the gross proceeds from movable property.
In 2003 Motala was arrested in connection with fraud and corruption, but he was never charged. There were allegations of an inappropriate friendship with then Minister Penuell Maduna, who was said to have inappropriately given Motala preferential treatment.
Motala explained that the sale of the Pamodzi Free State assets to Harmony Gold was a sale of “business assets’ and in terms of the Insolvency Act the tariff was 10% and not 3%.
He said there appeared to be some confusion between fixed assets and fixed property.
Andre Prakke, a forensic auditor investigating corruption in business, said that the Insolvency Act nowhere referred to business assets, only referring to movable and fixed property.
Prakke said the definition of fixed assets had been clearly defined in the agreements of sale that he had studied.
The applicable tariff could in no way be considered ambiguous, he said. He reckoned a “quick calculation” showed that the money amounted to around R30 excluding VAT.
Matthew Klein, who had been a liquidator for 15 years before starting practice at the bar, said there were so many items in the agreement of sale that the Master should have determined the tariffs payable for each item.
The items include fixed property for which a 3% tariff is applicable. The liquidators were remiss in not indicating the purchase price per item and the Master was also negligent in not questioning that tariffs, he said. Klein said it was too late for tears now because a ratification carried as much weight as a court order.
Motala stressed that the account had indeed lain open for inspection at the Master’s office for the statutorily prescribed time. No objections had been received and the Master had approved it.
According to the account, R67m was being paid out to workers, 4 000 of whom had lost their jobs in the Free State liquidation process.
GREAT DISCOMFORT
Seshoka said he had been unaware that the account had been lodged. The union had not been informed, which would have enabled it to peruse the account. The lodging appeared to have been done secretly, he said after Media24 sent him the account.
The Free State assets were the first to be sold. Pamodzi’s Free State, East Rand and Orkney operations had been placed in provisional liquidation in 2009.
The sales realised R439.6m and the joint liquidators’ fees amounted to R43.2m.
Solidarity’s Gideon du Plessis said that they, too, had not been aware that the account had been lodged, despite having asked to be kept fully informed of progress.
Solidarity had handed the Master an official request for an investigation into the Pamodzi liquidation, because too many things that had happened had cause them great discomfort.
The unhappiness between unions and the liquidator deepened when outside the court last month NUM members demanded Motala’s head after the long-awaited finalisation of black-empowerment company Aurora’s bid for Pamodzi’s remaining assets was again postponed, this time to August.
– Sake24.com
