The bankers of Cape plc, the company that reached an out-of-court settlement with South African asbestosis victims last year, would be held personally responsible if it is proved they were responsible for reneging on the agreement, the victims’ legal counsel said on Tuesday.
The directors of the company and its bankers, Barclays and the Royal Bank of Scotland, were formally notified of this on Tuesday, Richard Meeran of the legal firm Leigh, Day & Co said in a statement from London.
Cape Plc mined asbestos in the Northern Cape and Limpopo for 90 years up to 1979. Thousands of people have been suffering from asbestos-related diseases since, and they instituted a claim for compensation against the company.
In terms of the settlement reached in December last year, Cape Plc was to pay compensation to the amount of 21-million pounds (about R342-million), of which 11-million pounds was supposed to have been paid by June 30 this year.
”But there is still no sign of the money,” Meeran said on Tuesday. ”The company was earlier given until September 14 — next Saturday — to pay over the money.
Meeran said Cape Plc had told the claimants’ lawyers in December that its shareholders supported the settlement and that the banks had in principle approved the restructuring process the company envisaged undergoing in order to raise the money.
Since that time, a lot of work had been done on the claimants’ behalf to implement the settlement, he said. About 7 000 individual claims had been processed. Mechanisms were established to distribute money from a trust fund founded for this purpose.
In May this year the South African government gave Cape the undertaking that it would not pursue claims for the rehabilitation of the mines, in order to ensure that the claimants got their payment.
The claimants’ lawyers had acted for free since December, the statement said.
”All this was done on the strength of Cape’s continual and repeated assurances that it would honour the agreement. Many more have died during this period.”
Meeran said Cape had stated publicly that it would sell its industrial services division to raise money for the settlement. It was unclear why Cape and its bankers had decided at the eleventh hour not to go ahead with the sale.
”Instead Cape decided to resort to borrowing the money. But according to Cape, its bankers will not lend Cape the money even though the banks have adequate security for such borrowing.”
The proposed sale of Cape’s manufacturing division was expected to be approved at an extraordinary shareholders’ meeting on Wednesday. This would generate 5,6-million pounds net cash for the company, Meeran said.
”Cape and its bankers are apparently proposing that this money should be paid to the banks rather than the victims.”
Barclays should apply its stated principles of corporate responsibility, he said.
”Cape’s public stance is that it remains committed to the settlement, but casual words of reassurance are no longer of any comfort to the victims. The claimants’ lawyers no longer trust the company.”
If Saturday’s deadline was not honoured, the claimants would have no alternative but to return to court, Meeran said.
”The asbestos victims have already been abused once by Cape and it must not be allowed to happen again. We fully intend to see this through to the end to ensure that their rights are enforced.
”In pursuing that objective, the net is likely to be extended beyond Cape Plc.” – Sapa