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Pamodzi mine controversy drags on

Sunday, 26 January 2014 09:07
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Pamodzi mine controversy drags on Aurora Empowerment Systems, whose board members included President Jacob Zuma's nephew Khulubuse Zuma, Nelson Mandela's grandson Zondwa Mandela and businessman Thulani Ngubane, was seen as the saviour of liquidated mining company Pamodzi Gold when it took over two of its mines in 2009.


Aurora was appointed as the preferred bidder by the joint provisional liquidators of Pamodzi, one of whom was controversial liquidator Enver Motala. Then a new company, packed with a "who's who" of political heavyweights allegedly presented a "beautiful" bid to the liquidators to buy Pamodzi's gold assets for close to R400-million.
But cracks soon began to show when it became clear that the father-and-son team of Solly and Fazel Bhana, who were brought on by Aurora's board as "consultants and advisers", were "calling the shots". During a 2012 inquiry into the collapse of Pamodzi Gold, questions were raised about allegations that tens of millions of rands made from gold sales were surreptitiously being diverted into private accounts, mostly belonging to members of the Bhana family, whereas thousands of mineworkers went unpaid.
At the time, Aurora's management denied that money was being used for non mining purposes or that it was involved in asset-stripping, but allegations persisted regarding shady deals at the mine. Some of the allegations related to "mystery" trucks that were said by sources to be removing equipment from the shafts.

Aurora removed as bidder

Following the removal of Aurora as the preferred bidder to run the two mines in late 2011, after which the company was itself put into liquidation, liquidators sought to have Fazel and Solly Bhana, along with Zuma, Mandela and Ngubane, held personally liable for the R2-billion debt owed to Pamodzi.
In a 2012 court application, one of Pamodzi's joint provisional liquidators, Johan Engelbrecht, claimed that the men had "managed the affairs of Aurora recklessly with the intent to defraud" Pamodzi's liquidators and creditors.
Engelbrecht also noted that Pamodzi had "proved claims in the insolvent estate of Aurora" to the value of R122-million in gold sales and R1.8-billion incurred through the destruction of the mines' assets.
The Bhanas tried to distance themselves from the management of Aurora during the Pamodzi inquiry.
But in his testimony, Zuma said that the controversial pair were involved in Aurora "prior to negotiations which ensued for the purchase of Pamodzi".
Engelbrecht noted in his court affidavit that Zuma "confirmed that, in his experience, the Bhanas were the main contributors to the decision-making of the running of the company".
The matter brought against the Bhanas and former Arurora directors by the Pamodzi liquidators has been set down for August this year.

amaBhungane reporters for Mail & Guardian

Read 14498 times Last modified on Friday, 06 November 2015 05:44