[miningmx.com] — MHLATUZE Bay Coal Administrators (Mhlatuze) has hit back at the department of mineral resources (DMR) over the DMR’s statements concerning fraud and misuse of the Quattro coal export scheme.
In terms of the Quattro scheme, 4 million tonnes (mt) per year of coal export allocation has been earmarked through the Richards Bay Coal Terminal (RBCT) for use by junior black economic empowerment (BEE) coal mining companies.
Specifically, Mhlatuze pointed out the fraud – involving at least R5.5m – had been reported to members and stakeholders including the DMR in July last year.
That contradicts the statement released by the DMR on March 7 which implied the DMR had only recently uncovered the fraud.
The DMR statement said: “The department acted decisively when it uncovered some maladministrative practices at Mhlatuze.’ It added: “In order to prevent further misappropriation of Quattro funds, the department has decided to remove the administration of Quattro from Mhlatuze to Ubu Logistics.’
Ubu Logistics executive Portia Molefe has confirmed to Miningmx that it took over running Quattro from February 21 this year.
In a statement released on Thursday, Mhlatuze pointed out that “the suspicion of misappropriation or abuse of funds by a former employee was identified after his departure by the former board of Mhlatuze.
“At an annual general meeting (AGM) of the company in July 2010, that board formally advised the members of the estimated value of certain unaccounted-for funds belonging to members as established by the company’s auditors.
“In addition the board ensured that other interested parties were kept informed; in particular the coal industry task team (CITT – an oversight committee chaired by the DMR), the RBCT and Transnet Freight Rail (TFR) were advised of developments.
“At the same meeting the members elected a new board. In the interests of transparency, the board has continued to inform members on a regular basis of progress made on the subject of the alleged misappropriation.
“Since the July 2010 AGM there have been two additional formal meetings of Mhlatuze at which members, whose funds it is that have been misappropriated, received updates. The board has always acted with the support of the Mhlatuze members who have approved the strategy and actions taken by the current board.’
The statement said Mhlatuze had instituted civil and criminal proceedings against the former employee during 2010 – an action the DMR press release implied the DMR had just carried out itself.
The DMR statement said: “We are in possession of documentation that clearly demonstrates how a former employee of Mhlatuze defrauded the organisation of huge sums of money.’
The DMR press release also raised the issues of alleged “fronting’ by some Quattro members, as well as that the programme primarily benefits “traders and some large mining companies instead of the junior BEE coal traders’.
The DMR said: “We are fully committed to eradicate fronting and other forms of business malaise that were afflicting the programme.’
Mhlatuze has now pushed the accountability for such alleged actions straight back at the DMR.
The Mhlatuze statement said: “Mhlatuze does not have authority over, and is in no way responsible for, the process of allocation of export tonnage entitlement through the RBCT to Quattro users.
“Comments in the press relating to possible fronting and the involvement of trading companies in the supply chain, or the matter of members not mining their own coal but trading coal from other companies, refer to aspects of the programme which were never within the ambit of Mhlatuze but were rather the responsibility of the CITT.”
