Zuma’s nephew opts to go it alone in suitComment on this story
Khulubuse Zuma has distanced himself from the other Aurora Empowerment Systems directors, opting to get his own lawyer to defend a R1.7 billion claim against their personal estates.
Zuma has been accused of having been “in complete dereliction of his statutory duties as a director” during the two years that Aurora managed the former Pamodzi Gold East Rand mines.
And his association with the company could cost the president’s nephew his R1.9 million house, several luxury cars and his businesses if the Pretoria High Court accepts the arguments made by the joint liquidators of the Pamodzi mines.
Zuma’s co-directors, Zondwa Mandela, Thulani Ngubane and two Durban-based businessmen, Sulliman and Fazel Bhana – who are also listed as respondents in the case – have retained the same law firm. Zondwa Mandela is Nelson Mandela’s grandson.
Zuma’s lawyer, Eddie Claasen of BDK Attorneys, would not say why Zuma had decided to go it alone.
Claasen confirmed that he had put in a request for various documents related to the case.The lawyer said Zuma’s responding papers could be finalised only after the documentation arrived.
However, Zuma’s sizable fortune could be at the root of his decision. In April his spokesman, Vuyo Mkhize, put Zuma’s wealth at R100 billion.
Zuma has a R1.9m Umhlanga home, and is an active director of 26 companies. The businesses import and export sand and transport crude oil. In addition, he owns a fleet of taxis and 12 luxury vehicles.
In April three of his luxury BMWs and household appliances were auctioned for R160 000 to pay for Aurora-related debts.
By contrast, Mandela does not appear to own any property personally. According to a Windeed search he is an active director of eight companies, some of which have links with Aurora.
Ngubane also does not own any property personally, but also has several directorships.
In an inquiry by the Master of the High Court into the liquidation of the Pamodzi mines and Aurora’s subsequent management of its East Rand mines, this formed the basis for the liquidator’s claim against the directors and their business associates.
In terms of section 424 of the Companies Act, directors or anyone else involved in the running of a company can be held personally liable for any damage done to the company under their leadership.
At the hearing, Zuma testified that there had been an “understanding” that he would not be involved in the day-to-day business of the mines.
According to an affidavit by liquidator Johan Engelbrecht, Zuma “relied on information and facts given to him” by Mandela, Ngubane and the Bhanas because he often travelled abroad on other business.
“Mr Zuma was at pains to explain that, although he was a director, he was not involved in the day-to-day affairs of Aurora,” Engelbrecht said.
“It was clear from Mr Zuma’s evidence that he was completely out of touch with the true course of events with regard to the veracity of financial support” Engelbrecht said.
David Swartz of Phillip Silver and Associates, who is representing Mandela, Ngubane and father and son Fazel and Sulliman Bhana, said his clients would not be requesting documents before filing a response.
Swartz said Zuma’s application was “a delaying tactic and not something that we are embarking on”.
The firm was drafting an “extensive response”.
“This matter is going to end up being referred for oral arguments. There are such disputes of fact, it will not be decided purely on (court) papers,” Swartz said.
“What I want to stress is that my clients want their day in court. The way I want to litigate is to get this matter to court as soon as possible,” he said.
Attorney John Walker, who is representing the joint liquidators, said his clients had agreed, for the sake of fairness, to grant Swartz more time to draft a response.
“From our point of view, you can run, but you can’t hide,” Walker said.
Walker added that the liquidators would comply with Zuma’s request for documents.