Khulubuse Zuma faces financial wipe-out

28 June 2015 - 02:00 By LONI PRINSLOO

President Jacob Zuma's nephew, Khulubuse Zuma, could be shaken down for his last penny after a judge found him and other directors of Aurora Empowerment Systems guilty this week of reckless mismanagement of the Grootvlei mine, near Springs on the East Rand. Zuma, who was chairman of Aurora, was not found guilty of "fraudulent conduct", unlike fellow directors Thulani Ngubane, Nelson Mandela's grandson Zondwa Mandela, and father and son Solly and Fazel Bhana.But he is jointly accountable for any claims for damages, and for costs incurred as a result of reckless and bad management, according to Judge Eberhard Bertelsmann, who called the Grootvlei transaction a "pipe dream".This means that although Zuma cannot be criminally charged, he is possibly the most exposed of the directors when it comes to financial liability because of his many business interests, including in African Spear Trading.The former chairman stands to lose everything.Zuma put R35-million of his own money into the Grootvlei mine, which was bought from liquidated Pamodzi Gold.story_article_left1The directors allegedly sold the mine's equipment when funding failed to materialise.The deal was apparently pushed through by now suspended liquidator Enver Motala and the Bhana family.Zuma was brought on board later, mainly for his political connections.The deal at the time was hailed as championing black economic empowerment, but greed and a lack of mining experience turned it into one of the biggest social tragedies yet in the mining industry. The mine was left in ruins, and the workers and the community were left destitute.Bertelsmann ruled on Thursday that Zuma and his fellow directors should pay the liquidators up to R1.7-billion for the mine and in damages.But this might be just the tip of the iceberg.In coming weeks, the mine's creditors will hold a meeting at which they will submit their claims. Creditors include the SA Revenue Service, Eskom, Telkom, the local municipality and workers. The claims, if proved, could bankrupt Zuma and the other directors.Solidarity's Gideon du Plessis said the union's claim for its members alone would be about R4.5-million. The maximum that can be claimed for a worker when a company goes insolvent is R28 000.But it could take years for the claims to be realised.Solly Bhana said he would appeal the judgment within the next two weeks. Zuma referred questions to his lawyer, who did not answer calls.However, he has apparently started talks with Solidarity about paying its workers, but is waiting for a legal opinion .This week's judgment was handed down six years after the mine went into liquidation and two years after a case against the directors was opened. Ngubane and the Bhanas allegedly also stripped and sold off assets at Blyvooruitzicht gold mine, which went into liquidation...

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