Aurora stuns with R15m refund claim

[] — AURORA Empowerment Systems has requested it be refunded R15m by the Joint Provisional Liquidators (JPL) of Pamodzi Gold’s East Rand mine, a development that has drawn the ire of unions and provoked a fierce response from the nominated liquidators.

The R15m was paid by Aurora Empowerment Systems to the JPL after it was nominated the successful bidder for the Pamodzi Gold mines in October, 2009. Aurora Empowerment Systems now claims it should be repaid because its preferred bidder status was cancelled on May 26 this year.

Acting on behalf of Aurora Empowerment Systems, Amod’s Attorneys wrote in a letter dated August 8: “As you are well aware our client’s deposit is a post-liquidation expense and in terms of the insolvency act is deemed a secured creditor of the estate having a preferred right over the proceeds’.

If the R15m is not re-paid within seven days of receipt, Aurora Empowerment Systems would lodge an urgent application to interdict the sale of the Pamodzi assets with the Supreme Court of South Africa, Amod’s said in its letter.

The demand has been fiercely rejected by lawyers representing JPL who said that any application would be “vehemently opposed’.

Pamodzi Gold’s Orkney assets are now subject of a R150m bid from China Africa Precious Metals (CAPM). CAPM is 74% owned by Superb Gold, an affiliate of the SSC Mandarin Group of which 26% is owned by a broad-based black economic empowerment consortium, led by Elias Khumalo.

Khumalo is a business affiliate of South African president, Jacob Zuma, according to the Mail & Guardian, a weekly newspaper. Aurora Empowerment Systems has Khulubuse Zuma, nephew of Jacob, and Zondwa Mandela, grandson of Nelson Mandela as directors.

Responding on behalf of the JPL, John Walker Attorneys said Aurora Empowerment Systems was not entitled to any refund. It also invited Aurora to move whatever application it chose “. which application would be vehemently opposed’.

“It is further our instruction that your client’s threatened application . is stillborn, vexatious and fraught with malice. In the result, our clients will seek a punitive costs order against your client as part of their opposition to that application,’ John Walker Attorneys said in a letter on behalf of JPL.


Solidarity, which waged a prolonged battle against Aurora Empowerment after allegedly stopping miners’ wages in March, 2010, said the union would “definitely’ oppose the payment of any monies to Aurora Empowerment.

However, Gideon du Plessis, deputy general-secretary of the union, said lodging an interdict against the sale of the mines would backfire. “I would think taking this to the Supreme Court would probably fast-track the criminal investigation into the directors at Aurora.’

An audit into damage caused on the East Rand mine since salaries to miners was halted, and the level of reinvestment required showed some R486m was required, said du Plessis. He also said Aurora directors had recouped their initial R15m investment in the mine through gold sales. “They’ve enriches themselves tremendously,’ he said.

“…your client’s threatened application . is stillborn, vexatious and fraught with malice.”

Lesiba Seshoka, spokesperson for NUM, said he couldn’t comment until having sight of the attorneys letters.

If authentic, Aurora’s position would be: “. highly disappointing’. “You only have to look at the plunder at the mine and see what state the mine is in compared to how it was,’ Seshoka said.

Aurora Empowerment Systems burst on to the mining scene in 2009 promising to invest R600m in the Orkney mine in South Africa’s Free State province and the Grootvlei mine in Springs.

The capital never materialised, however, and repeated promises Aurora Empowerment had lined up co-investors proved empty. Meanwhile, the mine was repeatedly looted while Grootvlei’s pumping station had to be lifted in order to avoid flooding and effective sterlisation of the resource.

Solidarity requested Aurora pay R3m in unpaid miners’ salaries while some company representatives, including Jacob Zuma’s former lawyer, Michael Hulley, appeared before the Master of the High Court last week answering to allegations the mine had been asset-stripped.

Testimonies this week, most of which have been heard behind closed doors, will help inform a decision on whether there are grounds for prosecuting Aurora Empowerment and if damages can be claimed.