Aurora miners lose faith as court battle drags on

THREE years after Aurora Empowerment Systems left the Grootvlei and Orkney gold mines in ruins, former employees say they have little faith in a long-delayed court process to recover outstanding payments.

THREE years after Aurora Empowerment Systems left the Grootvlei and Orkney gold mines in ruins, former employees say they have little faith in a long-delayed court process to recover outstanding payments.

Protesting outside the North Gauteng High Court this week, former Orkney mine staff said they were tired of delays and empty promises about pay and other benefits owed to them since 2009 and now estimated at about R28-million.

Liquidators of Pamodzi Gold, which owned the Grootvlei and Orkney mines when the company went into liquidation in 2009, are trying to recover more than R1.7-billion in damages from directors and managers of Aurora, which took control of the mines but never coughed up the purchase price.

Aurora's directors and managers included Khulubuse Zuma, a nephew of President Jacob Zuma, Zondwa Mandela, a grandson of Nelson Mandela, Thulani Ngubane and Fazel and Solly Bhana. Liquidators want to hold them personally liable for the alleged stripping of the assets of Grootvlei and Orkney and an alleged loss of income of R122-million derived from gold sales which were not accounted for. The Aurora players are opposing the application.

"I saw with my own eyes how suitcases of cash were handed over in exchange for scrap metal and other things at Orkney mine," a former employee, who worked at the mine for seven years, said outside court.

"But we never saw a cent of the money that was coming in. Ever since 2009, nobody has been held accountable."

The wheels of justice may be turning slowly. The same court this week ordered several members of the Bhana family and some associates to pay back R15.5-million, less than half of liquidators' claim of R35-million, to the estate of Aurora, which was placed under liquidation in October 2011.

An application for leave to appeal against the ruling was dismissed, raising hope that workers may start seeing some of the outstanding money from their time as Aurora workers.

However, Solly Bhana, patriarch of the family, said in an affidavit that he had been unable to raise funds to pay his lawyers and could not pay rent at a house in Houghton due to legal costs. He and his wife had been served with an eviction order, the affidavit stated.

The court battle over the R1.7-billion claim has been postponed to next March.

Khulubuse Zuma, who denied any wrongdoing in his affidavit, saying he was a nonexecutive director and not in charge of the day-to-day running of the mines, highlighted a number of legal arguments against the liquidators holding Aurora directors held liable.

He insisted that Aurora was sufficiently funded at the time of preparing the bids for the Pamodzi assets.

According to various testimonies during the Pamodzi liquidation hearing, it was clear that Aurora had no money at the time of making the bids in October and November 2009.

But this did not stop the company from making fantastical promises in their winning bids to Pamodzi's liquidators.

A broke Aurora offered R215-million for Orkney mine, promising R115-million in short-term capital expenditure, re-employment of all staff and plans to upgrade five shafts.

It offered R390-million for the East Rand assets, which included Grootvlei, with plans to spend R200-million over five years to extend the life of the mine to 2025. Promises of external funding fell through with Aurora unable to meet conditions attached to the deals.

While battling to raise funds to pay the purchase price and fund the running costs of operations, gold and other assets, sold as scrap, were allegedly taken from the mine.

Zuma denied in his affidavit that Aurora produced any gold despite Solly Bhana saying in his papers that money for gold sales were received on Wednesdays and Saturdays.

Zuma said scrap sales were done to ensure the "safety of the public", and not to fund care and maintenance operations at the mines. "Any scrap sales were necessitated by the fact that there had been unlawful stripping of assets of the mine, and scrap materials left behind were posing a danger to the public. In those circumstances, consent to sell some scrap was sought and given by the liquidators."

He denied claims that he and any of the Aurora players were guilty of "stripping and dissipating assets of the mines and theft of gold. The loss of assets was mainly due to criminal activities and illegal mining".

Zuma said he paid about R35-million, which included R5-million for wages, to help fund running costs, mainly security.