The case brought by 7 500 South African mineworkers against UK multinational, Cape Plc, took a new turn on Friday when London-based and local lawyers joined forces and challenged the terms of Gencor’s proposed unbundling in the Cape Town High Court.
The court action stems from Cape Plc’s sale in 1981 of Cape-owned asbestos mining operations to Gefco, a former Gencor subsidiary.
Gencor shareholders meet on Tuesday to consider whether or not to approve the unbundling which provides R400-million for the legal costs of defending asbestos claims, but nothing to compensate victims, said Richard Meeran of attorneys Leigh Day and Co in London.
”We might be more relaxed about the situation if Gencor’s shareholders, such as Sanlam, who stand to gain substantially from the proposed unbundling, would agree to pay the compensation of Gengor loses,” he said.
Meeran said R400-million was insufficient to cover claims of existing claimants involved in the UK case against Cape Plc, let alone the claims of other victims in South Africa.
”Gencor appears to be justifying its stance on the grounds that it has no liability,” he said.
He said claimants were faced by precisely the same argument from Cape Plc and Thor Chemicals two years ago.
”In September 2000, the UK Court of Appeal was highly critical of a financial manoeuvre by which Thor Chemicals had effectively dissipated almost its entire asset. Thor Chemicals settled shortly afterwards,” he said.
Meeran said South African lawyers Ntuli and Spoor represent a substantial number of victims suing Gencor in respect of asbestos operations owned by its former subsidiary, Gefco.
The 7 500 claimants in the UK Cape Plc litigation were exposed to asbestos from operations owned by former Cape Plc owned subsidiaries, Cape Blue Mines, Egnep and Amosa, which were sold to Gefco in 1981, he said.
Meeran said many of these claimants worked for and lived near these operations before and after 1981 and therefore have claims against both parent companies, Cape Plc and Gencor.
He said claimants who worked for or lived near entirely different Gefco owned operations, also have claims against Gencor on this basis.
”In view of Cape Plc’s failure to honour the December 2001 settlement agreement, we have taken steps to revive the UK litigation and to seek a trial date,” Meeran said.
He said Cape Plc repeated its commitment to the settlement, but claimed it was dependent on the co-operation of its bankers, Barclays and Royal Bank of Scotland.
He said numerous members of parliament in the UK have written to the banks, urging them to be socially responsible.
”We have also applied to the UK High Court to join Gencor and Cape Plc’s former parent company, UK based Charter Plc as co-defendants to the UK claim against Cape Plc,” he said.
He said when notification of the claim was made to Gencor in July 2002, its company secretary, J Marais, requested removal of Gencor’s UK registered office from the Companies’ Register, to prevent proceeding being served on Gencor in England. – Sapa