Bad blood rising

[] — THE five-year relationship between Mark Wellesley-Wood, CEO of DRDGOLD, and Roger Kebble, chairman of Randgold & Exploration, is as incredible as it’s acrimonious. The two men have sued and allegedly spied on each other; Kebble has been imprisoned (in a series of events allegedly orchestrated by Wellesley-Wood); Wellesley-Wood was deported (allegedly through Kebble’s links with the Government’s Home Affairs Department).

And all the while, both have gladly seized the opportunity to firmly place a hob-nailed boot to the other’s scrotum – preferably in public.
For example, who can forget Wellesley-Wood’s dubbing as “that pin-striped bandit’ – an indelicate sobriquet invented by Brett Kebble, Roger’s son, during one live radio interview during 2002?

But that’s nothing. Wellesley-Wood has wreaked a different kind of reputation destruction on the Kebbles. It’s now four years since Wellesley-Wood first accused Roger Kebble of fraud, an allegation from which the veteran miner has never recovered.

The collateral damage has been huge. A stream of careers has perished, or at least indelibly harmed, as the two mining captains continually find means of reprising their smack down.

DRD directors Nick Goodwin and Vic Hoops, Western Areas director John Stratton and Maryna Eloff and Benita Morton, DRD’s company secretary and legal adviser respectively, have been drawn into the fray. Many have lost their jobs and their reputations. And depending on whom you speak to, they’ve become the sacrificial lambs or supporting villains in a story that’s familiar even to those with no interest in mining.

But casual observers can be forgiven for wondering how the feud began and how it’s been able to spin out of control.

The irony of it all is that Wellesley-Wood was Roger Kebble’s good idea. It was Kebble who, in 1999, thought Wellesley-Wood would be a perfect candidate to take the non-executive chairmanship of Durban Roodepoort Deep (now renamed as DRDGOLD) in an effort to meet the company’s corporate governance standards.
Wellesley-Wood was already in SA, having been nominated by British stockbroker Mercury Asset Management, a shareholder in Western Areas, to sit on that company’s board. His nomination followed the sale in 1998 of a 50% stake in Western Areas’ mine South Deep by Brett Kebble to Placer Dome.

As a result, Mercury was anxious to receive a form of special dividend. Wellesley-Wood, plucked from relative obscurity at Kleinwort Dresdner, where he was working as a banker, was their man in Johannesburg.

Wellesley-Wood proved himself an able lieutenant for Roger Kebble: he was a miner, had corporate banking experience – he even loved rugby. He also, principally, resolved DRD’s board composition problems. Wellesley-Wood also sat on a special committee during 2000 that cleared the Kebbles of wrongdoing following attempts by them to torpedo Harmony Gold’s hostile takeover of Randfontein Estates, a company the Kebbles wanted to use to help drive the finances of a Canadian-listed firm.

However, soon after taking a seat at DRD, something changed. Mike Prinsloo, then CEO of DRD, was ousted and replaced by Wellesley-Wood. That proved to be the final chapter in the fleeting moment of peace between the two men.

In a directive to DRD shareholders in 2003, Wellesley-Wood declared soon after his appointment in May, 2000 that he had “. . .received information regarding possible irregularities in DRD of a very serious nature and at a high level of management’.
Less than two years later, Wellesley-Wood also ousted Roger Kebble from DRD’s board, a move conducted with surprising elan given that it was a brutal moment, even for an old mining dog like Kebble. Kebble was given the deputy chairman’s role in a sunset period that lasted mere months.

Nobody was in any doubt regarding what was happening: Wellesley-Wood declared to a surprised audience that the departure of Roger Kebble from DRD was a final goodbye to the “K’ Factor. Kebble, sitting in the audience, was ashen-faced and furious.

What followed was an intricate and costly forensic odyssey, estimated by the Kebbles to be in excess of R90m, to uncover the complicated business activities of the Kebbles. These activities left a paper trail that originated in Johannesburg, passed through Perth in Western Australia and ended up in South Sumatra, an Indonesian island. From events traced back to 1998, DRD had spent R123m in May 2002 on an Indonesian mine – Rawas – that had no intrinsic value. Shares had also been illegally issued, DRD alleged.

Legal suits were launched in Johannesburg and Western Australia’s Supreme Court, the aim of which was to prove that Western Areas director John Stratton and DRD director Charles Mostert had allegedly colluded with nominee companies to fraudulently siphon monies from shareholders.

At root, though, was Roger Kebble, who had sat atop the company in the Nineties directing affairs – even without the knowledge, it would appear, of his CEO, Mike Prinsloo.

Amazingly, the listed entity, DRD, sailed through the crisis relatively unharmed.
In yet another irony, Roger Kebble had helped promote DRD as a magically geared trading stock in the minds of North American investors. This was a legacy of branding that completely inured the company against the corporate shocks that now raged around it between 1999 and 2003.

Critics of Wellesley-Wood thought he was marshalling public opinion against the Kebbles in order to deflect attention away from DRD’s poor operational performance. Its mines, as Wellesley-Wood recently conceded, were always “crap’. But if Wellesley-Wood had also contributed towards the legacy for DRD it was to have added offshore mines to its portfolio.

Now, finally, the rebranded DRDGOLD has the chance to establish a track record of making profits rather than headlines.

Unsurprisingly, the feud between the Kebbles and Wellesley-Wood has boiled up again. Roger Kebble, now cracking the whip at Simmer & Jack Mines, has accused DRDGOLD of having a long-standing agenda of closing down SA mines. “Most of the monies raised over the past few years by DRDGOLD have been spent on assets outside of the country, which has left the SA assets undercapitalised,’ Kebble said after bidding – and failing – to buy DRDGOLD’s operating and provisionally liquidated mines.

Nobody seriously believes that Wellesley-Wood wants to close down the company’s mines or that he’d sell his existing SA mines to Kebble. But in the eyes of the National Union of Mineworkers, Kebble has cast Wellesley-Wood as a ravenous uitlander. Offers recently to settle all outstanding legal issues between Kebble and Wellesley-Wood are simply disingenuous noises in this corporate cabaret.

Nothing has changed. Kebble wants his company back and thinks that Wellesley-Wood has never been at his weakest than now. The saga continues.