Bosasa, Smuts Ngonyama in battle over R7m mining dividends
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Johannesburg - The family of late Bosasa chief executive Gavin Watson will battle with South Africa’s ambassador to Japan, Smuts Ngonyama, and his company at the Supreme Court of Appeal (SCA) over nearly R7 million in dividends.
Watson’s nephew and executor of the controversial businessman’s estate, Jared Watson, is heading to the country’s second highest court on Thursday to challenge a South Gauteng High Court ruling that ordered him (Jared Watson) to immediately take whatever steps necessary to restore the former head of the ANC presidency and spokesperson’s company Thunder Cats Investments 92’s shares.
The shares are in mining firm Ntsimbentle Holdings and were substituted for ordinary shares by Gavin Watson to Bosasa Youth Development Centres, which is under liquidation.
The South Gauteng High Court ordered Jared Watson to pay all dividends earned and interest of 10% a year from the date the shares were donated and first registered with Bosasa Youth Development Centres.
The SCA must determine whether Ngonyama and Thunder Cats Investments 92 proved that Gavin Watson, who died in August 2019, misrepresented himself by inducing the diplomat and his company into donating shares to Bosasa Youth Development Centres on the basis that it was a BBBEE firm, when in fact it was beneficially owned by the late businessman and his interests.
Gavin Watson lied about the structure and beneficial shareholding of Bosasa Youth Development Centres, according to Ngonyama.
He accused Gavin Watson of using him and his company as a front in violation of BBBEE legislation, which makes it a criminal offence to commit such acts.
The court must also decide if Ngonyama and Thunder Cats Investments 92 were entitled to demand transfer of shares held by Bosasa Youth Development Centres.
In February, Ngonyama and his company stopped the payment by Ntsimbentle Holdings of R400m in dividends and told the high court that they were in imminent danger of losing R6.8m unless they were urgently granted an interdict before Ntsimbentle Holdings paid out the dividends.
Ngonyama donated 8.33% of his shares in Ntsimbentle Holdings to Bosasa Youth Development Centres based on Gavin Watson’s misrepresentation.
In 2019, Judge Fayeeza Kathree-Setiloane found that Ngonyama is the beneficial owner of a third of the shares held by Thunder Cats Investments 92 in Ntsimbentle Holdings.
Jared Watson is challenging the findings of the high court at the SCA.
Ngonyama and Thunder Cats Investments 92 feared that their millions would be paid to an insolvent company’s liquidators, who have litigated aggressively and use Bosasa funds for legal fees.
Ngonyama and his company were also concerned that the dividends would probably not be recoverable.
In his ruling on Ngonyama and Thunder Cats Investments 92’s bid to stop the payment of dividends to Bosasa Youth Development Centres, South Gauteng High Court Judge Thifhelimbilu Mudau interdicted and restrained Ntsimbentle Holdings from paying the dividend to Bosasa Youth Development Centres pending the outcome of Jared Watson’s SCA appeal of Judge Kathree-Setiloane’s ruling or any timeously noted and prosecuted challenge to the Constitutional Court of the outcome of the SCA decision.
Judge Mudau also ordered Ntsimbentle Holdings to hold the dividends Ngonyama and his company believe they are entitled to in a separately designated interest-bearing account pending the final outcome the SCA appeal and a possible challenge in the apex court.
The company was also ordered to pay the dividends and all interest earned to Ngonyama and Thunder Cats Investments 92 should the SCA and later the Constitutional Court rule in their favour.