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REPORT BY THE JOINT PROVISIONAL LIQUIDATORS RELATING TO THE PAMODZI GROUP OF COMPANIES TO THE MINERAL RESOURCES PORTFOLIO COMMITTEE 28 OCTOBER 2011 1.

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Presentation on theme: "REPORT BY THE JOINT PROVISIONAL LIQUIDATORS RELATING TO THE PAMODZI GROUP OF COMPANIES TO THE MINERAL RESOURCES PORTFOLIO COMMITTEE 28 OCTOBER 2011 1."— Presentation transcript:

1 REPORT BY THE JOINT PROVISIONAL LIQUIDATORS RELATING TO THE PAMODZI GROUP OF COMPANIES TO THE MINERAL RESOURCES PORTFOLIO COMMITTEE 28 OCTOBER

2 CONTENTS  Summary of events since January 2011  Master’s enquiry in terms of section 381 of the Companies Act  Aurora removed from Orkney and East Rand Mines  State of Orkney and East Rand Mines on possession by the JPLs  Action taken by the JPLs since repossession of mines  Enquiry in terms of section 417 and 418 of the Companies Act  Way forward 2

3 SUMMARY OF EVENTS SINCE JANUARY 2011  Master’s enquiry in terms of section 381 of the Companies Act  Aurora removed from sites  State of mines when possession handed back to JPL’s  Action by JPL’s since re-possession of mines  Enquiry in terms of section 417 and 418 of the Companies Act 3

4 MASTER ENQUIRY IN TERMS OF SECTION 381 OF THE COMPANIES ACT  Master convened enquiry into the administration of the Pamodzi Group of Companies estates;  All the liquidators were called to testify;  Master removed Messrs Gainsford and Motala;  The JPL’s cannot comment on the removal of the former JPLs as it is a decision of the Master and the matter is sub judice given a review application of Gainsford and Motala. 4

5 AURORA REMOVED FROM ORKNEY AND EAST RAND MINES  During May 2011 Aurora was put to terms for non- compliance with the terms of the Interim Contract Trading & Mining Agreement;  Aurora failed remedy breaches in terms of demand;  Aurora notified to vacate the mining sites;  JPL’s took possession of East Rand and Orkney mines. 5

6 STATE OF ORKNEY AND EAST RAND MINES ON POSSESION BY JPLS  Large scale removal and destruction of assets;  No accounting by Aurora in respect of Gold Removal in terms of ITCMA;  Un authorised sale of assets belonging to Pamodzi under the control of Aurora;  No insurance over the assets and a lack of sufficient security. 6

7 ACTION BY JPL’S SINCE POSSESSION OF MINES  Significantly secured both Orkney and East Rand Mines being cash constrained  Funded limited care and maintenance by limited gold clean-up at East Rand and Orkney Mines  Regular consultation with NUM and Solidarity  Engaged with the Department of Labour relating to the payment of workers, efforts frustrated by computer crash  Commenced with training lay off scheme under auspices of the CCMA 7

8 ACTION BY JPL’S SINCE POSSION OF MINES (Continued)  Instituted a transparent process by Standard Bank to source alternate buyers for Orkney and East Rand Mines;  Regular consultation with IDC and HVB the secured creditors of Orkney and East Rand  Concluded and agreement to sell Orkney to CAPM for R150 million, subject to certain conditions precedent including labour consent for sale  Currently considering offers for the sale of East Rand Mines 8

9 ACTION BY JPL’S SINCE POSSESSION OF MINES (Continued)  Regular reporting to the Master;  Water pumping – negotiations with DMR and DWAF;  Ongoing and regular updates to Organised Labour;  Responding to illegal mining and theft of assets;  Enquiry by the Master in terms of section 417 and 418 of the Companies Act. 9

10 ENQUIRY IN TERMS OF SECTION 417 & 418 OF COMPANIES ACT  Master of the High Court ordered enquiry;  Scope of enquiry inter alia includes:  Non payment of workers;  Recovery of damages, including personal liability of parties  Appointment Aurora as preferred bidder;  Assets theft, including fixed assets and gold;  Location of proceeds from gold sales;  Investigation if any fraud, including on DMR and DWAF;  Improper relations;  Events that led to demise of Pamodzi.  Enquiry in progress and unable to comment on evidence. 10

11 WAY FORWARD  Returned date extended by High Court to 25 April 2012 to enable finalisation of disposal process in the interest of creditors.  Finalisation of disposal of Orkney mine and East Rand or realisation of assets on a piecemeal basis with the consequent issues arising therefrom.  Workers claims to be paid on receipt of disposal proceeds subject to secured creditor consent.  Legal action to claim damages. 11


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