Wesizwe faction fuels split

The top brass of platinum miner Wesizwe have been secretly financing a split within the ranks of its largest shareholder, the Bakubung-Ba-Ratheo tribe, new documents show.

The platinum junior is 24.4% owned by the 30000-strong community, which split into factions last year over support for Wesizwe CEO Mike Solomon and chairman Rob Rainey, who were ousted in November amid claims of a breakdown in governance.

In December, Solomon and Rainey were re-elected to the board by 51% of shareholders, while the directors who red-flagged the governance problems - including Iraj Abedian - were booted out.

At the same time, rival factions of the Bakubung have been locked in a war for control of the community's R286-million Wesizwe investment, pitting the royal family against its traditional council.

This war has implications for Wesizwe: it was the royal family led by Margaret Monnakgotla that voted to re-elect Solomon in December - in the face of opposition from the traditional council and Monnakgotla's brother, Ezekiel.

Now, records obtained by the Sunday Times show that Wesizwe has been funding the royal family's legal battle against Ezekiel's faction.

An invoice from law firm Webber Wentzel for R982232, dated March 30, asks for payment for representing the royal family in a Mafikeng High Court case against Ezekiel for effective control of the community's affairs.

A deposit slip from Standard Bank shows that Wesizwe paid the law firm on May 6.

This seems to contradict Solomon's claim last month of Wesizwe's "oft-stated intention not to get involved in internal community affairs". He said that it was "unfortunate" that Wesizwe kept getting dragged into ''these internecine conflicts".

When asked on Friday why Wesizwe was financing one shareholder faction against another, chairman Dawn Mokhobo confirmed the legal assistance, but said this was "in the form of a loan, which is repayable once the (royal family) has access to its financial resources".

Mokhobo said Wesizwe had been "instructed" by the Department of Mineral Resources to help the royal family resolve the "alienation of the community shares in Wesizwe".

This "alienation" refers to the family's concern that half of the Bakubung's stake in Wesizwe was transferred to a company called Newshelf 925 by the community's adviser, Musa Capital - supposedly to raise cash, but raising concerns that the shares had disappeared.

Royal family member Maria Monnakgotla said on Friday it was ''not true" that Wesizwe paid the family's legal bills. But when asked about the legal bill, she said ''I can't comment on that. Why don't you ask the other side who pays their legal bills?"

DJ Phologane, who represents the rival traditional council, said: ''It seems Solomon is sowing divisions by working with one faction of the royal family, which supported him, against the other."

The issue for investors is how Wesizwe, already struggling to find cash to develop its mine, thinks that financing this shareholder dispute is a prudent use of funds. Mokhobo said Wesizwe was simply "complying with the directive" to resolve matters. Other concerns remain. In January, Mokhobo hired Deloitte and Denys Reitz to probe "everything", including claims that Solomon was improperly paid a R14.8-million bonus.

Last month, Wesizwe said the probe had "concluded that the allegations against Rainey and Solomon were unfounded". But the reports have not been released, while three independent directors have quit since January.

Investors won't get to quiz the board any time soon. Wesizwe's AGM is scheduled for August - nine months after its December year-end.