Eskom boss 'faked' mining right claim

12 February 2017 - 02:00 By TANIA BROUGHTON
Ben Ngubane and his wife, Sheila, say they own Huntrex 305 shares.
Ben Ngubane and his wife, Sheila, say they own Huntrex 305 shares.
Image: GALLO IMAGES

Embattled Eskom chairman Dr Ben Ngubane is accused of using "poorly fabricated" documents to lay claim to lucrative sand and stone mining rights in order to shield them from creditors of a liquidated company he owns.

Ngubane, who was left scrambling this week to explain why Eskom shelved a damning forensic report implicating top officials in procurement tender breaches, is in the middle of a legal battle over his mining company, Huntrex 305. The company, owned by Ngubane and his wife, Sheila, had debts of about R80-million when it was wound up two years ago.

But creditors, mainly Brikor and Ithala Bank, have not be been paid because of a legal war in the High Court in Durban over the ownership of the mining rights, which are the most valuable assets in the failed company's estate.

The liquidators said Tugela-based Huntrex owned all the shares in Natal Sand Supplies and Zululand Quarries - the entities that hold the mining rights.

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But Ngubane - a director of 16 companies - said he and his wife personally owned these shares. His proof of this was "questionable", the liquidators said.

Joint liquidator Neil Button launched the court application last year, securing an interim order in effect "freezing" the shares until the outcome of the dispute.

Ithala, a KwaZulu-Natal provincial government-funded development agency, although cited as a respondent, supports the application. In an affidavit last week, a senior official expressed "astonishment" at the Ngubanes' claim to the rights.

The Ngubanes filed a notice of opposition in December but agreed to the order to freeze the shares - "without admitting any allegations against them". In their papers, they have joined Mineral Resources Minister Mosebenzi Zwane.

They argue the liquidator cannot sell the two companies as only the minister can decide, as the "custodian" of natural resources and gatekeeper of licences.

Button, in his affidavit, said that in 2011 Huntrex bought Brikor's Stanger-based businesses, including Natal Sand Supplies and Zululand Quarries, for R85-million, with loans from Ithala and Brikor. It was stipulated that Huntrex could not sell any assets until the full amounts were paid.

"The business [being run by Sheila] floundered and failed. The debts were not repaid and Ithala brought the liquidation application. When we [the liquidators] took control, Huntrex was hopelessly and commercially insolvent," Button said.

Its assets were just short of R32-million but liabilities were more than R80-million.

block_quotes_start They have refused to grasp the nettle and say under oath anything about the purported transfer of the shares block_quotes_end

The liquidators cast about for a buyer and, in April last year, Sandton Plant Hire offered R6-million for the property and R15-million for the two companies and their licences.

But the Ngubanes cried foul and laid claim to the shares.

Button said: "We have done investigations but despite diligent searches have been unable to locate the share registers. " He said the share certificates produced by the Ngubanes were not authentic because they were incorrectly numbered, reflected changed values and, in one instance, referred to Zululand "Querries" instead of "Quarries".

"They are poor fabrications."

He said there was also no evidence that Huntrex had been compensated for the shares, as it should have been if they had been transferred to the Ngubanes. If they had been transferred, it was after the date of liquidation, contrary to the agreements with Brikor and Ithala and to the law.

Button said Sandton Plant Hire had walked away from deal.

In an affidavit filed this week, Ithala executive Nkosinathi Nhlangulela said the mining rights were always Huntrex's most valuable asset. Ngubane had signed a cession agreement so any transfer to the Ngubanes was illegal, he said.

The Ngubanes, through their attorney Manogh Maharaj, declined to comment.

The only affidavit filed is one by Sheila, seeking to join Zwane and labelling the application "fatally flawed".

The minister also declined to comment.

Paul Firman, the attorney representing the liquidators, said the matter would be set down for argument soon. "The Ngubanes have only raised a technical point," he said. "They have refused to grasp the nettle and say under oath anything about the purported transfer of the shares or about the allegations regarding the false documentation.

"We see this as a delaying tactic."

sub_head_start No pay for quarry staff sub_head_end

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While a legal battle rages over the lucrative assets of Eskom chair Ben Ngubane and his wife Sheila's liquidated company, the employees of the now-insolvent Zululand Quarries site between KwaDukuza and Mandeni are paying the price.

The 33 non-unionised workers say they have not been paid since December.

The quarrying operation, which produced the raw materials for making concrete bricks, has been almost totally shut down. But bricks are still being made with the remaining stocks of sand and stone.

Much of the equipment, including trucks, excavators, graders and crushers, is covered in rust.

The bottom of the quarry is filled with water but it is otherwise empty except for a pump.

The despondent workers do not know when their next payday will come.

"Things have been very hard for us," said one.

"We were called into a meeting in January and promised that our salaries will be paid, but it's February now. We don't know what is going on."

Another employee said the Ngubanes never gave any indication that the business was in trouble.

"I have worked here since 2012 and not even once did I suspect we were in the red. Then one day we get told Sheila is leaving and liquidators are moving in.

"They were good people but now we have to fend for ourselves," the employee said.

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