Judge finds evidence of criminal acts by lawyer first implicated in Kumba/ICT scandal

A HIGH court judge found evidence that a lawyer, with a history of alleged fraudulent mining deals, guilty of criminal conduct related to another Northern Cape mineral rights scandal.

In October 2019, Judge Swanepoel, together with two other judges, found in a ruling delivered in the North Gauteng High Court in Pretoria that there was clear evidence that Advocate Phemelo Sehunelo, and fellow company director Lionel Koster, were guilty of criminal conduct.

This finding came as part of a ruling related to a court battle between Genet Manganese and Sehunelo’s Autumn Skies Resources and Logistics (ASR) over minerals rights.

Genet Manganese has an interest in manganese and iron ore resources in the Northern Cape, involvement in the Swartkops Manganese Terminal located outside Port Elizabeth in the Eastern Cape, coal mining in Mpumalanga, and other interests, according to the Genet website.

Kobus Smit, Genet South African chairman, declined to comment about the court matter when contacted by Miningmx.

The ruling follows a successful court challenge by Genet of the dismissal by South Africa’s Mines and Energy minister, Gwede Mantashe, of the company’s appeal against the granting of two mineral rights in the Northern Cape to ASR.

ASR later brought an appeal against that court ruling, which Swanepoel dismissed last year.

This court case is not Sehunelo’s first brush with the law, as he was a key player at the centre of another Northern Cape mining embarrassment that started in May 2009.

Kumba Iron Ore and Gupta-linked Imperial Crown Trading (ICT), of which Sehunelo was the founder and CEO, ended up at loggerheads over a mineral right on a portion of the Sishen iron ore mine.

That mineral right was one that ArcelorMittal South Africa failed to convert to a new order right.

The Department of Mineral Resources and Energy (DMRE), as it is known today, rejected Kumba’s mining right application for Arcelor’s 21.4% stake in the Sishen mine but granted ICT a prospecting right.

Kumba accused ICT and the DMRE of fraud relating to the application and granting of the prospecting right.

Kumba alleged that ICT copied and falsified the Sishen mine’s title deeds and submitted a forged document to the DMRE.

The granting of the prospecting right triggered a court battle that Kumba ultimately won in December 2013, when the Constitutional Court ruled in the company’s favour.

The ICT case was the precursor to years of alleged fraud that characterised the Zuma administration, including his association with the Guptas and their alleged theft of billions of state money.

In August 2010, Arcelor bought ICT for R800m as part of a R9bn black economic empowerment deal, but a year later the deal lapsed.

ASR got its mining right in fraudulent circumstances after Sehunelo misrepresented to the DMRE regional manager that Autumn Skies Trading 128 and ASR were the same entity, Swanepoel said.

He did so to get the mining rights for ASR, but he knew that ASR was not entitled to apply for the rights, the judge said.

The mining operation, over the area held by the contested mineral rights, had been ongoing since December 2017 and was illegal, the judge added.

ASR’s lawlessness was contrary to all aims expressed in the preamble to the Mineral and Petroleum Resources Development Act, Swanepoel said.

Considering ASR’s conduct, and that of its directors, the judge issued a punitive costs order against the company.

Koster made substantial misrepresentations in a supplementary affidavit, and he was at least prima facie guilty of perjury, Swanepoel said.

Swanepoel referred the judgment to the National Public Prosecutions’ (NPA) National Director of Public Prosecutions, Shamila Batohi, for consideration about whether to lodge criminal charges against Sehunelo and Koster.

NPA national spokesperson Sipho Ngwema told Miningmx that the NPA was investigating the issues raised by Swanepoel’s judgment.

The battle between Genet Manganese and ASR is an example of a string of cases of wrongdoing uncovered at the DMRE Northern Cape office.

Away from ICT, another example of mineral right fraud that cast doubt over that DMRE branch’s ability to regulate the industry was the incident involving former ANC Northern Cape chairperson, John Block.

Block mined salt in the Kalahari with a fraudulent mining licence.

Another mineral rights mess up in the Northern Cape was the matter involving Aquila Steel South Africa, Ziza and Pan African Mineral Development Company.

The DMRE’s Northern Cape office granted Aquila and Ziza overlapping prospecting rights, but in 2015, the DMRE set aside Aquila’s mining and prospecting rights, which Aquila then challenged.

In 2017, Judge Tuchten ruled in Aquila’s favour and found a “high degree of institutional incompetence” at the DMRE.

5 COMMENTS

  1. How does the good Advocate Phemelo Sehunelo remain a member of the Bar? If a judge finds prima facie evidence of criminal conduct – isn’t that enough to be disbarred? Or has everyone given up caring

  2. The NPA is so dysfunctional the reporter’s enquiry was probably the first they had heard of it. “Investigating the issues raised” sure, pull the other one. 3 judge bench found prima facie evidence 10 months ago and the NPA is still “investigating the issues raised”.

  3. Let’s hope he turn state witnesses and tell the authorities which government officials were involved. We know it all was initiated from within DMR.

  4. More and more DMRE appeal decisions are being challenged in court… and successfully so. The appeal process is supposed to be independent but one cannot help believing there must be a lot of political interference.
    The DMRE is an incompetent institution… not my words but that of the courts. There is no way that such an institution can make decisions validly… as a result of its reputation all decisions can be challenged. It is an untenable situation and something need to give.
    – The appeal process must be run independently by a tribunal of sorts.
    – The databasis SAMRAD must be availabe for all and transparent.
    – DMRE officials must implement the law and refrain from being involved in manipulating business for personal gain.

    • SAMRAD in itself is a failed system created by an amateur using ‘freeware’. It’s just not fit for purpose and should be scrapped in favour of something more professional.

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