[miningmx.com] — AFTER the searching and, to some, obscure questions lawyer Denis Daly asked at the JCI special meeting called to approve the sale of the 27 million Western Areas shares to Gold Fields, it was a little surprising when the resolutions were carried by 99.99% of the votes present – or, to be precise, by 1.54bn votes to 17,000.
After the meeting Daly, who was representing Letseng Diamonds, the company linked to Monty Koppel which is involved in legal action over JCI’s sale of its stake in the Letseng diamond mine, nevertheless assured me that he had no hidden agenda, and that he was simply trying to ascertain for the benefit of all shareholders exactly how the sale of the Western Areas shares can be reconciled with JCI’s obligations to Investec under the latter’s “rescue” refinancing of JCI.
In brief, the answers seemed to be that while JCI had breached the terms of the Investec agreement in about February or March by failing to make repayments timeously, this had been remedied within recent weeks. Investec didn’t exercise its rights in terms of the breach but reserves its rights under the agreement.
JCI chairperson Dave Nurek said he is confident that JCI had taken all reasonable efforts to extend the Investec repayment, and CE Peter Gray agreed.
In response to another question, Nurek said JCI is still pursuing the issue of shares allegedly issued fraudulently. A problem is that some of these have been traded on the JSE and are now legitimately owned by innocent third parties, but JCI is still trying to recover shares held by parties who received them directly as a result of fraud.
Daly also queried the costs of the Western Areas transaction, estimated in the notice of the meeting at R5.7m. These include payments of R2.5m to ex-stockbroker Sidney Frankel’s company, Frankel Consulting, and R1.5m to Investec as “transaction adviser”.
Nurek said the actual figure shouldn’t vary much from this, adding that in his experience the costs appear to be reasonable for a transaction of this size.
The Letseng case is scheduled to come up in court again later this month, and despite Daly’s assurances that he had no hidden agenda, there were those present who felt some of the information he elicited regarding the terms of the agreement with Investec could be relevant to that case.
Given the time legal processes take, though, it is possible that the Letseng case may be adjourned yet again, so we may not discover whether those suspicions have any validity.
And while on the subject of legal matters, I was also told after the meeting that the arbitration between JCI and Randgold & Exploration has just got under way and, for what it’s worth, that Randgold’s claim has now risen from just over R5bn to R5.9bn.