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MASTER OF THE HIGH COURT PAMODZI PRESENTATION OCTOBER 2014.

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Presentation on theme: "MASTER OF THE HIGH COURT PAMODZI PRESENTATION OCTOBER 2014."— Presentation transcript:

1 MASTER OF THE HIGH COURT PAMODZI PRESENTATION OCTOBER 2014

2 INDEX  BACKGROUND  COMPLAINTS / BAD PRESS  CALIE SMIT  SECTION 381 ENQUIRY  REMOVAL OF MR EM MOTALA AND MR GC GAINSFORD  SECTION 417/418 ENQUIRY  COMMISSIONER’S REPORT  REFERRAL OF COMMISSIONER’S REPORT  CALLING ON SECUTIRY BONDS BY JPL 2

3 The Pamodzi Gold companies consisted of 3 mines: -Orkney -Welkom (Free State) -Grootvlei (East Rand) Pamodzi Gold Orkney (Pty) Ltd and Pamodzi Gold Free State (Pty) Ltd were placed under judicial management in January In March 2009 these 2 companies were placed under provisional liquidation.

4 4 BACKGROUND continue……… June 2009, the Grootvlei mine, which were registered in 5 companies: -Pamodzi Gold East Rand (Pty) Ltd -Nigel Gold Mining Company -Consolidated Modderfontein Mines Limited -Consolidated Modderfontein Mines 1979 Limited -Grootvlei Proprietary Mines Limited were placed under provisional liquidation. The holding company, Pamodzi Gold Ltd, was ultimately provisionally liquidated in October The Master proceeded to appoint provisional liquidators in each of the companies at the time they were provisionally liquidated, based on support by creditors and the practice to include a previously disadvantaged individual as a liquidator.

5 COMPLAINTS / BAD PRESS During October 2010, there were a series of bad press articles regarding the management of the mines by the management of Aurora Empowerment Systems, who were, at the time, managing the mines in terms of an ITCMA entered into between the JPL (Joint Provisional Liquidators) and Aurora Empowerment Systems. Complaints were also received by the Department of Justice from organised labour Solidariteit and NUM. The Chief Master’s Office called for a meeting with the JPL on 19 th November 2009 to address the complaints lodged by organised labour and the JPL were requested to provide written response in this regard. The JPL provided the Master with the required information and were also requested to provide fortnightly reports to the Master regarding the status of the mines, which were provided.

6 CALIE SMIT During April 2011, the Master was approached by Mr Calie Smit, the in-house legal representative of Aurora Empowerment Systems with information that he regarded as important to the Master. Mr Smit provided information, together with documentary proof, which prompted the Master to initiate a section 381 (of the Companies Act) enquiry. Section 381 is a section in the Companies Act which places a duty on the Master to ‘…take cognisance of the conduct of a liquidator…’ The purpose of the section is to determine the suitability of a liquidator to be appointed in a matter; whether this is a fit and proper person to be entrusted with the administration of an insolvent estate/liquidated company. Based on the information provided by Mr Smit, it was apparent that a section 381 enquiry should commence without delay

7 SECTION 381 ENQUIRY The Master proceeded to hold an enquiry in terms of section 381 in May 2011 Several relevant witnesses testified in this enquiry. The JPL were subpoenaed to testify on 16 and 17 May Four of the JPL cooperated with the Master, whilst two of the JPL (Messrs Motala and Gainsford) declined to cooperate.

8 REMOVAL OF MR EM MOTALA AND MR GC GAINSFORD Due to Mr Motala and Mr Gainsford’s unwillingness to cooperate with the Master in the section 381 enquiry, the Master removed them as liquidators from all Pamodzi matters on 23 May The reason for their removal from these matters was that the Master no longer deemed them suitable to act as liquidators on these matters.

9 SECTION 417/418 ENQUIRY The remaining JPL approached the Master on 29 th June 2011 to commence an enquiry in terms of section 417/418 of the Companies Act to determine the whereabouts of assets of the companies. The Master appointed Adv Wayne Gibbs as Commissioner of this enquiry. The enquiry commenced in in July 2011 and was finalized in April Over 40 witnesses testified in this enquiry and the testimony of witnesses and evidence were in excess of pages.

10 COMMISSIONER’S REPORT The Commissioner finalized his report in this regard in October 2013 and same was presented to the Master on 19 th October In terms of the Insolvency Act and Companies Act, the Master must refer any contraventions of the Companies Act reported by the Commissioner in his report, to the NPA for possible prosecution. Based on the conclusions reached by the Commissioner and the facts presented in the report, the matter was referred to the NDPP on 18 th November The NDPP, as already reported in the press, confirmed that there is a prima facie case for prosecution.

11 REFERRAL OF COMMISSIONER’S REPORT After receiving the determination by the NDPP, the report was referred to the SIU in February The SIU required a proclamation to enable them to proceed with the investigation.

12 CALLING ON SECUTIRY BONDS BY JPL The Master is currently in the process of calling on the security bonds of the JPL in the above matters.

13 THANK YOU


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