Tuesday, 09 February 2010
Loading...
|
||
|
|
Advanced search  |
|
|
|
|
|
|
|
Tuesday, 09 February 2010
Loading...
|
||
|
|
Advanced search |
|
Fear and loathing PwC sued for R7,6bnIn the mother of all damages cases, Brett Kebble’s ghost haunts the erstwhile auditors of horribly looted Randgold & Exploration. Barry Sergeant08 May 2008 00:00 JOHANNESBURG - Randgold & Exploration (R&E) is suing PricewaterhouseCoopers (PwC), one of the world's "Big Four" auditors, for R7,6bn, in what surely ranks as the biggest damages case in South African history. The summons in the case was quietly served on PwC on Friday, March 7 2008, but the detailed particulars of claim in the case only emerged this week, after your intrepid reporter had spent weeks doing whatever was necessary (and of course legal) to obtain the papers, which number well over 300. Despite the public domain classification of the
papers, R&E had declined to hand over copies, in line with its apparent
intention of keeping the case away from stricken R&E shareholders. R&E
attorneys in the case against PwC are listed as Van Hulsteyns, where may be
found attorney Andrew Legg, who has been known for some time to Peter Gray, the
incumbent CEO of R&E and its once-bent sibling, JCI. The two have been
suspended from the JSE since August 2005. Starting in at least 2000, the late Brett Kebble, who controlled both entities, started looting R&E in order to fund JCI's capital starvation, mainly from its funding commitments at the South Deep ultra deep gold mine, west of Johannesburg. In the years that followed Kebble and a closely bound network devised endless sneaky schemes to loot R&E, mainly by thieving valuable shares it held in other listed companies, and selling the same for cash. Kebble, who lost control of R&E and JCI in August 2005, and was brutally murdered the next month, is identified as one of the main dramatis personae in the case against PwC, along with Roger "Teflon" Kebble, Hennie Buitendag (Brett Kebble's ubiquitous financial director), John Stratton (latterly seen in Perth, Australia), Charles Cornwall (latterly back in the UK), and smaller players such as Patricia Beale (ubiquitous Brett Kebble company secretary), George Poole (frustrated helicopter owner and pilot) and the mysterious Lieben Swanevelder. According to the court papers, many of the stolen shares were laundered through Tlotlisa Securities (T-Sec), a Johannesburg-based stockbroker where Peter Gray was apparently CEO for some years before taking the helm at R&E and JCI in August 2005. The court papers are extensive, as noted, but the typical allegation is to the effect that various of the named players conspired to deprive R&E through theft of various numbers of shares at various times. The cash proceeds were used to first, provide JCI with working capital; second, pay entities and individuals "in an endeavour to promote generally corrupt relationships" to secure various benefits for JCI, and third, to confer on the principal players, and also various unknown persons, "homes, motor vehicles and other luxury items". Most of the looted cash - by far - was derived from the theft and sale of 24,6m shares R&E held in Randgold Resources (today an independent and successful company in its own right). The claim against PwC on this score is R5,9bn, and includes 4m Randgold Resources shares that ended up in deals with SocGen (Johannesburg) and 5,46m Randgold Resources shares that ended up in deals with Investec UK. Before taking up the helm at R&E and JCI in August 2005, Gray had for years worked at SocGen (Johannesburg). Also in August 2005, the chairman's position at both R&E and JCI was taken up by David Nurek, from Investec. PwC audited R&E for each of the financial years to December 31 in 2000, 2001, 2002, and 2003. A number of the crooked transactions were conceived and executed, or consummated, after December 31 2003, but R&E alleges in court papers that PwC "failed" in no less than 31 specific areas (just one sample: "failed to exercise the professional care and skill of an auditor in public practice"). R&E essentially argues that had PwC done its job properly, it would have detected the "unlawful and wrongful misappropriation" of 2m DRDGOLD shares during the 2000 financial year. The argument continues that, in essence, had PwC property done its duty by exposing this specific looting, the rest of the carnage and larceny would have been stillborn.
COMMENTSView disclaimer
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
 |
||||||||||||||||
