Bakubung calls for its Wesizwe directors to quit

Allan Seccombe & David McKay | Thu, 26 Nov 2009 11:36
[miningmx.com] -- THE Bakubung-Ba-Ratheo, a North West province community that holds shares in stricken platinum junior Wesizwe Platinum, has disavowed its two Wesizwe Platinum board representatives, including Disele 'DJ' Phologane.

Phologane is the subject of allegations in documents handed to Miningmx on Monday which say Wesizwe Platinum's empowerment structure, which once had the Bakubung a 32% shareholder in the firm, is now in tatters.

According to the allegations - refuted by Phologane and his advisor Antoine Johnson - the Bakubung's shares in Wesizwe worth hundreds of millions of rands, were transferred to a shelf company which has US investor, Johnson as its director.

Phologane told Miningmx the Bakubung was informed of the transfer of shares aimed at diversifying the Bakubung's asset base just as another North West province community, the Royal Bafokeng, have successfully done with its platinum interests.

However, Keneilwe Danke, who was appointed the spokesperson for the 30,000-strong Bakubung community, says Phologane and another Wesizwe Platinum board member, Ezekiel Mannokgotla, who is also the Bakubung's kgosi (king), were not elected by the community to sit on Wesizwe's board.

Phologane serves as his advisor. They are both members of the Tribal Council, which was set up to manage the Bakubung's affairs.

“The community does not want them on the board of Wesizwe. They just appointed themselves and they never had a mandate or approval of the community,” said Danke.

“Phologane is everywhere. Johnson is everywhere," said Danke. "There’s too much conflict of interest. Those two are no longer looking after the affairs of the community. They are looking after their own personal interests."

At a meeting attended by about 2,000 people last week, calls were made for the two men to step down, she said. The Bakubung community is due to meet again on Saturday.

“We are unaware of any such competent demand,” Phologane and Johnson said in a detailed written reply to questions posed by Miningmx, among them whether Phologane and Mannokgotla were asked to quit the Wesizwe board.

In its response to Miningmx, Johnson outlined the formation of Newshelf 925 as a way to prevent the community’s dilution in Wesizwe.

He said the community’s current asset base was now worth R700m instead of the R240m it would have been with its original holding.

But the documents in Miningmx’s possession argue that the community is now encumbered with debt raised against those shares - a claim Phologane denied.

In-fighting

In a community, which by all accounts is fractured one, it's difficult to say how many people for whom Danke is speaking. But a separate account confirms thousands of Bakubung community members met last week and voiced their discontent with the handling of their Wesizwe interests.

In their detailed written reply to Miningmx, Phologane and Johnson outlined the formation of a new Tribal Council which took over from the Tribal Authority in 2006 as per legislation governing how these traditional leadership structures are set up. The Tribal Council appears to have some problems, thought, with membership numbers falling for a number of reasons, including the claim that some people were not ethnically qualified.

“This has triggered additional conflict within the community, with many of the decisions of the new Council being questioned by followers of those now excluded from participation in the Council,” Phologane and Johnson said.

A scheme proposed by Musa Capital that was endorsed by the Council was the transfer of 43.85 million Wesizwe Platinum shares from the community to Newshelf.

There was no mandate from the community at large for the share transfer, said Danke, who added the Council has been suspended, something Phologane denied.

“The community is not aware of this Newshelf 925 and we intend to lay a charge. Our shares are in Wesizwe and not Newshelf. I don’t know how this will be solved by the people who made the transfer, but it has nothing to do with us,” said Danke.

Phologane said the transfer of shares were authorised by the kgosi and the Tribal Council.

Asked why the community was only now demanding these two men resign from the board, Danke said there had been repeated attempts to dislodge them.

“Nothing was done because there was political interference. It’s not easy to succeed in resolving these things. It’s been a five-year struggle.” Phologane is also a prominent member of the African National Congress (ANC) in the region.

Wesizwe, already struggling to raise R6bn to build a platinum mine, has seen its board changed radically. Wesizwe Platinum CEO, Mike Solomon, was ousted along with five non-executive directors. They were replaced with new members who have left some shareholders unhappy.

According to an announcement on the JSE's Stock Exchange News Service late last night, Wesizwe Platinum has convened an extraordinary general meeting on December 17 to hammer out its problems.

Charles Sambo, chief operating officer at Wesizwe, told Miningmx on Wednesday that all the allegations against Phologane and his colleagues, would be dealt with at the EGM.

"We have discussed all of these things at a very high level, at board level," he told Miningmx. "We will have answers for all of this but I don't want to comment now," he said.