Two empowerment companies linked to slain businessman Brett Kebble’s JCI are determined to continue life without the colourful mining magnate.
Masupatsela Investment Holdings (MIH) reached a settlement with JCI while Matodzi Resources prepared for a crucial annual general meeting on November 2 with its empowerment credentials at stake.
MIH reached a R1,5-million settlement with JCI over the latter’s failure to honour its commitment in a joint venture. The company initially estimated that it was owed R6,6-million and sought the liquidation of Consolidated Mining Management Services (CMMS), a controversial outfit at the centre of Kebble’s dealings. CMMS has been described as Kebble’s “slush fund”, which advanced a total of R1,4-billion over an 18-month period, much of which has not been properly accounted for.
This week, a directorship search showed CMMS to be associated with a total of 85 companies. These range from Simmer and Jack, the company that stepped forward to rescue DRD Gold’s liquidated North West operations; Koketso Investments, headed by Dali Tambo; two Mvelaphanda group subsidiaries; two JCI fisheries and South Atlantic Fisheries, another Kebble company with questions about its dealings hanging over it.
MIH also has an $11-million loan owing to Randgold Resources and Exploration, which is 15% held by JCI ordinary shares, which are currently suspended. The status of the loan remains unclear. Brian Gibson, spokesperson for JCI and Randgold, could not “comment on specifics of the relationship between the parties” pointing only to last week’s settlement as being “full and final”. Ongama Koyana, chairman of MIH, flatly refused to answer questions put to him, noting, “I do not do my business via the media.”
Matodzi Resources released its annual report ahead of an AGM in November in which questions about its viability persist. Current liabilities exceed total assets by about R240-million. Cash flow from operating activities was R67-million, while cash and cash equivalents stood at R58-million. This is hardly enough to develop an ambitious minerals portfolio in both South Africa and Angola. The status of its local mining rights is questionable. The company confidently states that it is in the process of having some of its mining rights converted to new-order mining rights. A key consideration in doing this is, among a range of criteria, looking at a company’s empowerment status.
At the November AGM, Matodzi will ask its shareholders to vote on converting JCI debt to equity, with JCI controlling 57%. Sello Rasethaba, CEO of Matodzi, is on record as saying black shareholders will ultimately buy out JCI. Gibson could not confirm JCI’s empowerment holding, saying that it would wait for an audit. The only empowerment holding that could be ascertained in JCI is Matodzi’s 9,9%, but Matodzi has warned it could be diluted after the November 2 vote. The biggest benefit for Matodzi is that it will significantly reduce debt.
Its key asset is the Letseng diamond mine in Lesotho, which it co-owns with JCI through Letseng Investment Holdings and the government of Lesotho. But even its exposure in that asset will be diminished when the company is under JCI control. This week, Rasethaba refused to comment, saying he would “be in trouble with the JSE” and would “only speak at the AGM”.