Pretoria - The High Court in Pretoria on Tuesday questioned how Aurora Empowerment Systems intended running mining companies when it did not have enough money for the massive project.
“What troubles me is the fact that control was given to Aurora in the beginning of 2009, with no discernible source of funds at that stage,” Judge Eberhard Bertelsmann said.
The court is hearing a claim for damages brought by Aurora's liquidators against the company's directors. The directors are accused of stripping the assets of the liquidated Pamodzi Gold mines in Springs, Gauteng, and Orkney, North West.
“As far as I remember the papers, there was no money in the kitty at that stage. How were the running expenses, and in particular the payment of the workers, going to be funded between October and December 2009?” Bertelsmann asked.
Louis Hollander, for Aurora directors Zondwa Mandela and Thulani Ngubane and consultants Fazel and Solly Bhana, said “family members came in”.
“There is a paragraph in my affidavit which says R15 million was available,” said Hollander.
He said the businessmen had courted a Malaysian investor, who they believed was going to inject money.
Hollander said the businessmen had taken a calculated business risk and should not be penalised.
The judge responded: “Well, it depends on the equation of the calculation. That is why I am asking you, between the beginning of October and the end of December 2009, as at the dates when the mines' responsibility was transferred to Aurora, what was in the kitty?”
He asked Hollander to explain what Aurora had, regarding promises of investment. Hollander said the amount rose to R30m.
“The point is that, my lord, there was funding in as far as the expenses were concerned. Other than just the purchase price of the mines, that funding came from family members.
“That funding may not have turned out to be ultimately all that was needed, but it cannot be said that when the respondents entered into the transaction there were any red flags to a reasonable business person that the transaction would not come to fruition,” said Hollander.
Former president Nelson Mandela's grandson Zondwa Mandela and President Jacob Zuma's nephew Khulubuse Zuma are among the company owners the Aurora liquidators want held responsible for the company's alleged fraudulent running.
The former mineworkers gathered outside court on Monday, waving placards.
Sapa