Zuma’s nephew challenges Pamodzi R1.5bn claims

An urgent application before Aurora D-day.

The North Gauteng High Court will on Thursday hear an urgent application by former director of Aurora Empowerment Systems and nephew of President Jacob Zuma, Khulubuse Zuma, to have claims of more than R1.5 billion against Aurora reviewed and set aside.

This application comes less than a month before the same court is set to hear an application which is aimed at holding Aurora’s directors, including Zuma, personally liable for the debts of the company totalling R1.7 billion (the main application).

Aurora was earlier appointed by the liquidators of the Pamodzi gold mines in Springs and Orkney to manage the troubled mines. It allegedly looted the mines and destroyed the infrastructure, selling it as scrap metal. Aurora was subsequently placed under liquidation when it couldn’t meet its financial commitments.

The R1.5 billion in claims that Zuma will be challenging on Thursday were instituted by the Pamodzi liquidators and comprise the biggest portion of what the directors may be held liable for. If this application succeeds, it may delay or even destroy the main claim.

Zuma argues in court papers delivered on Monday that one Mr Maphaha, working for the Master of the High Court, who presided over the meetings of creditors in the winding up of the affairs of Aurora, erred in approving the claims from Pamodzi. They consist of one claim of R122 million for the gold stripped from the mine and another of R1.4 billion, for the destroyed infrastructure.

He relies on sections of the Insolvency Act or, alternatively on the Promotion of Administrative Justice Act (PAJA) and argues that the claims do not comply with the requirements set in the Insolvency Act, or alternatively that the administrative process in taking the decision was flawed and the decision is therefore unlawful.

Zuma also points out that if he succeeds, Pamodzi will not be recognised as an Aurora creditor any longer. Since the main application was brought by the Pamodzi liquidators, they will lose their standing in the matter. That will be fatal for the main application.

He is further seeking a declaratory order in the failure of the Aurora liquidators to “independently and impartially examine and contest (the) Pamodzi claims – in the interest of Aurora’s body of creditors.”

Zuma alleges that the Pamodzi liquidators “railroaded the winding up of Aurora and usurped the statutory responsibilities of (the) Aurora liquidators.”

This, Zuma says, was “unscrupulously engineered” by the appointment of attorney John Walker to represent both sets of liquidators, while there is a conflict between their interests. “All of this, regrettably, at the watch of the Master and the second respondent (Maphaha).”

Zuma says Pamodzi also undertook to pay the legal costs of the Aurora liquidators. “The conflict of interests and the prejudice suffered by the body of creditors of Aurora including myself as former director of Aurora is self-evident,” he says.

He says the decision to allow the claims was either taken in bad faith, or in contravention of a law, or was unduly influenced by the attorney or Pamodzi liquidators acting in conflict of interest and is therefore unlawful.

Moneyweb has learnt that the liquidators of Pamodzi, who are all respondents in the case, will oppose the application.

Delaying tactics

General Secretary of trade union Solidarity, Gideon du Plessis, says this is just another tactic to delay the main application in March.

Solidarity is also an Aurora creditor, claiming R5.3 million on behalf of its members who worked at the mines.

The other directors who are also respondents in the main application, and may therefore also be held personally liable should that application succeed, are former President Nelson Mandela’s grandson Zondwa Mandela, Sheshile Thulani Ngubane. Their business partners, father and son Sulliman and Fazel Bhana are also respondents in the main application.

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