Allegations of R257m in fraud, theft and tax evasion levelled at Heaven Sent managers

Kopanang mine

TWO managers of a Chinese-owned South African gold mining company are fighting for their jobs and fear for their safety after blowing the whistle on R257m in alleged “irregular” and questionable spending.

Phillip Spencer, South Africa financial director for Heaven Sent Gold, the company that owns the Kopanang and Tau Lekoa mines, and his vice president for financial reporting, Stephanus de Koker, say their investigations uncovered R143.2m in “accounting irregularities”.

They stated this in a founding affidavit dated October 1 and filed with the Labour Court in Johannesburg.

According to the allegations, these “irregularities” were owing to “questionable transactions” entered into by Heaven Sent Gold South Africa CEO, Jeff Dong, chief operating officer Johan Jansen van Vuuren, and chief commercial officer, Mattheus Pieterse.

These deals were entered into between January this year, and August 25, Spencer and De Koker stated in the court documents.

They also estimate that these company executives allegedly “misappropriated” R68m due to irregular spending and questionable decisions.

In addition, Spencer and De Koker identified a further R46m in alleged questionable spending that benefited Dong, Jansen Van Vuuren, and Pieterse.

Dong wrote in a responding affidavit, dated October 5, that Spencer’s and De Koker’s allegations were “false and baseless”.

He acknowledged, however, that Spencer had expressed reservations about Heaven Sent Gold South Africa’s financial position, and that Spencer had alleged that the company’s Tau Lekoa mine was “potentially at risk of reckless trading”.

In April, Miningmx reported that the jobs of up to 6,309 employees were on the line at Tau Lekoa and Kopanang gold mines, as well as the West Gold plant, all located in South Africa’s North West province.

Heaven Sent operates the mines through South African subsidiary, Village Main Reef (VMR). The company lost R700m last year and its liquidity prospects worsened after Heaven Sent called off a listing planned for the Hong Kong Stock Exchange in December.

PURGE

The allegations follow a management purge at the company with the January ousting of Heaven Sent CEO, Owen O’Brien. Dong then took over as the CEO. He was previously a representative of the company’s main shareholder, the Heaven Sent Capital Group, headquartered in Hong Kong.

In February, after Dong became CEO, he made major changes to the company’s management.

Dong denied in the answering affidavit filed with the Labour Court that the new management of Heaven Sent Gold South Africa had attempted to sideline Spencer and De Koker.

Instead, it had attempted to implement managerial control over Heaven Sent Gold South Africa to address its dire financial situation, he claimed.

The manner in which Heaven Sent implemented the management changes came as a “complete shock” to the employees, according to another source close to the company who met with Miningmx.

Many VMR managers left the company after O’Brien’s departure, including those that Dong forced out, said another source.

Only five of the twenty VMR managers working at the company at the end of 2019 had survived the purge, the second source said.

Heaven Sent acquired VMR in June 2015 for R637m and delisted the company from the Johannesburg Stock Exchange. Then in 2018, the company bought the Kopanang mine and the West Gold processing plant from AngloGold Ashanti for R100m.

Spencer took his allegations of wasteful and irregular expenditure by Dong, Jansen van Vuuren and Pieterse to Michael Zhang, a director of Heaven Sent Gold South Africa, who lives in China.

Spencer said in his affidavit that Zhang had expressed concern about various aspects of financial and operational mismanagement and requested these allegations be committed to paper.

FRAUD, THEFT, TAX EVASION

In a letter to Zhang, Spencer alleged that there had been incidences of “serious mismanagement” at Heaven Sent.

The protected disclosure documents detail events that allegedly “may constitute illegal, irrational or unethical behaviour by the leadership and management of the company”.

“There was severe wrongdoing, fraud, theft, tax evasion at our company. The shareholder has taken no action to date. There are potential criminal charges here,” a source alleged.

Spencer and De Koker applied to the Labour Court in Johannesburg on October 1 for an urgent interdict against their employer from holding internal disciplinary hearings against them. The lawyers for Spencer and De Koker and the lawyers for the company appeared before acting Judge Sean Snyman on October 6.

Prior to the court hearing, the parties agreed that they transfer the disciplinary hearings to the Commission for Conciliation, Mediation and Arbitration in Klerksdorp where a commissioner would hear a pre-dismissal inquiry.

During a brief court hearing, Snyman sanctioned the draft court order to which the parties had agreed.

14 COMMENTS

  1. Phillip is a salt of the earth guy. I’d trust him with my life. And it doesn’t look like he will go down easily. Good for him.
    This kind of fraud is exactly what SA inc doesn’t need right now especially when it involves foreign investors being taken for a ride by dishonest South Africans.

  2. 3 times plant robbery. what happened it was never on the news. we lost our jobs be because of of planed thefts.
    what about MrChopper and others.
    manager who were on pension got paid with no tax and we were denied promotions and over time . no spares to fix and work safe.
    they broke laws . we are retrenched and they stole our money. 😠😠😠

  3. They have destroyed a lot of livelihood for the workers. They dismiss employees like dogs. Ruthless monsters. They will have their day in court. I salute the work the work that Spencer and De Koker has done. The South African mining industry needs leadership.

    [Moderated]

  4. VMR said that they didn’t have any money. Then explain to us how they afforded luxury vehicles for the Mr Jeff, Johan and Matt. Someone should have a look at the renovations at **** which cost more than R5 million! If each employee earns R12 000 per month then that is 35 people with families who did not need to get retrenched this year.

    [Moderated].

  5. Why would anyone, let alone the chinese, buy deep gold mines, with declining resources and high working costs and a limited life of mine?
    The money could be better spent on opencast low grade operations elsewhere in the world.
    The chinese also bought Taung Gold – Jeannette gm and Evander 6#.

  6. Vmr. Dont jail them. Take everything from them . Landcruisers. Property and give it to the employees in a form of a motivation bonus. Let them go dig in a dusbin for food like we did for seven months.

  7. Annn WORKER..
    The Hawks, the DMR as well as Sars and all the likes thereof MUST take action immediately as Johan Van Vuuren and his cowboys are now starting to strip Tau Lekoa, which will cause another potential asset to be destroyed. Tau has approx. 3 years of life and Weltevreden another 5 years and and and and. I can go on forever .
    Johan what about your Farm R50m s, your house near Pretoria, R25m s your Toyota Land Cruser and all the other assets that you purchased from the Gold that you have stolen ??? You, Matt and Old Jeff Dong are going to answer.

    [Moderated]

  8. If the employees are treated like this, what is done to the Contractors.? Contracts cancelled and no payment for work done in honesty – millions lost. Have to battle a court case to get our money….

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