Johannesburg - Liquidators are demanding millions of rands earned from the troubled Aurora mine and allegedly paid to a Johannesburg family while mineworkers starved.
Suliman Bhana and his son Fazel have been taken to court for the return of more than R30-million in gold revenue allegedly paid to family members and business associates.
The Pamodzi Gold liquidators have allegedly linked the Bhana family to several payments they describe as illegal and which they say have contributed to pushing Aurora into liquidation.
Aurora’s directors are Nelson Mandela’s grandson, Zondwa, President Jacob Zuma’s nephew, Khulubuse, and Thulane Ngubane.
Aurora took control of the liquidated Pamodzi mines in November 2009, and began gold mining operations. Aurora and Pamodzi were liquidated, mineworkers were not paid for several months, and numerous assets were allegedly stripped from the mines.
John Walker, lawyer for the liquidators, said there were seven cases in all, targeting the return of money allegedly paid to members of “the Indian community” who, it is claimed, had allegedly invested millions in Aurora. However the liquidators say that in some cases the investors received “up to 100 percent interest back on their alleged investment” while other creditors went unpaid.
This is the second attempt by the liquidators to go after individuals who, they believe, have sunk the former Pamodzi mines into bankruptcy.
In a separate case, the liquidators are aiming to have the directors declared delinquent – a move which could hamper their ability to do business.
However, according to evidence collected at an inquiry by the master of the high court, Aurora had no money to run the mine’s daily operations.
During the inquiry Fazel Bhana testified that as a consultant for Aurora, “my job is to raise money” – for which he and his father, Suliman, offered personal surety.
“It is private equity. I go to the whole Indian community and say ‘guys, here is a mining deal, there is a strong BEE partner and we have got the funding coming, it is going to print money’. There was nothing wrong with the deal,” Fazel Bhana testified at the inquiry.
There were no written agreements with the investors, according to Fazel Bhana, and the understanding was that their money would be paid back when R200m in international funding materialised.
“Everybody wanted the money back when our funding came through and the funding never materialised, so we had to borrow from Peter to pay Paul in the end,” Fazel Bhana testified.
In an affidavit in one of the seven cases, liquidator Christiaan de Wet said Aurora had failed to divulge that it did not have cash and had “purportedly”borrowed money from investors, a fact which may have hampered its bid for control of the Pamodzi mining operations.
He added that the local Indian community “consisted, however, of family members of Fazel and Suliman Bhana”.
De Wet said: “Clearly the intention was to prefer the (family) clandestinely.”
De Wet said the payments were kept from the Aurora directors. He referred to testimony during the inquiry where Ngubane was so shocked to hear of the payments, that he requested a break.
Ngubane said: “There is no way we could have… paid those investors from that time (November 2009 to April 2010), no ways. No ways.”
In his testimony, Fazel Bhana said the investors were “paid from the operational cash flow” from December 2009.
Meanwhile, Aurora financial manager Brett du Toit testified that Fazel and Suliman Bhana were the ones truly running the company.
“They took over all the financials, they took over the function of deciding what needs to get paid, what doesn’t need to get paid and my input was no longer really required,” he said.
Du Toit said Aurora “basically had the employees as their banking account” because “they got the work, the toil, the production from the employees, got the gold and did not pay the employees for that period of time”.
Suliman Bhana referred questions to lawyer David Swartz, who represents all the family members.
Bhana would not comment on the case, but told The Sunday Independent “there’s a lot of false allegations going on”.
Swartz, who also represents Mandela and Ngubane, said before the cases could go ahead, he would approach the court to get the liquidators to come up with R8m to cover legal costs. He has requested R1m for each of the seven cases relating to the R30m, and another R1m for the case against the directors.
These cases will have to be heard in court.
Swartz would not comment on the merits of the case against his clients, saying only that they are opposing all applications relating to the R30m in payments.
“The cases are still in their infancy and we haven’t filed responding affidavits yet. We’re not going to talk very much at this stage. We are waiting for the court to decide,” he said. - Sunday Independent