Two of the key empowerment companies embroiled in the massive theft from Brett Kebble’s JCI and Randgold & Exploration companies have hit back at suggestions that they were party to the alleged fraud.
Instead they claim they were duped by Kebble, in what has now emerged as a ”simulated transaction”, allegedly based on forged documentation.
Itsuseng Strategic Investments, chaired by Andile Nkuhlu, and Equitant Trading, led by Lunga Ncwana and Songezo Mjongile, were among companies targeted by Randgold in secret liquidation applications aimed at recovering assets stripped out of the company during Kebble’s reign.
Both were alleged to have benefited from an ”empowerment deal” put together by Kebble in which a consortium called Phikoloso purported to purchase 8,8-million Randgold shares, worth R268-million, by putting up its own assets.
Equitant was supposedly the owner of the assets, which consisted of a share portfolio worth between R219-million and R230-million — less than the R268-million because of the empowerment premium Randgold was prepared to pay. A separate company of Nkuhlu’s, Itsuseng Mining, was a shareholder in Phikoloso.
However, it has emerged from the forensic investigation into the theft of assets at Randgold that Equitant was never the owner of the assets it purported to bring to the table and, moreover, many of the shares did not even exist.
After the deal, Randgold company secretary George Poole, allegedly on the instructions of Kebble, sold all 8,8-million Randgold shares. Most of the proceeds went into dummy company accounts controlled by Kebble, but about R47-million worth went into an Equitant trading account.
R19-million worth accrued to Itsuseng Strategic Investments in the form of JCI shares, debentures and other shares.
According to Nkuhlu, they were transferred into the Itsuseng trading account without his knowledge. Nkuhlu said that on the advice of the new JCI directors he had redeemed some of the JCI debentures in January this year, believing they arose legitimately from another transaction. It was then that the discrepancy came to light.
He said Itsuseng, which he emphasised was solvent, had arranged to repay the undue benefit it had received through the simulated transaction. According to a statement from Equitant, the Phikoloso consortium had experienced difficulties in securing funding to buy into Randgold, so Kebble suggested he would put up assets that he owned personally. Phikoloso would then sign loan agreements to repay Kebble. However, following the investigation of the transaction by forensic auditors brought in after Kebble’s death, it has emerged that Kebble never owned the assets in the first place. Nkuhlu said he only became aware of this in about October last year after being briefed by forensic auditor John Louw. He then alerted Phikoloso and Equitant.
It is not clear, however, whether any loan agreements were ever signed with Kebble, or whether the liabilities of Equitant arising from the so-called loan from Kebble were ever disclosed.
The settlement agreement signed by Equitant and Randgold in March this year acknowledges that warranties given that there were no liabilities attached to the shares were false. Equitant admits that the sale of share agreement ”amounts to a fraud”.
Quite how Randgold’s legal and transaction advisers allowed this to go through has yet to be fully explained.
Like Itsuseng, Equitant says it was not aware of Poole’s instructions to sell the 8,8-million shares and it had, in any case, a three-year lock-in agreement. ”The Equitant directors never knowingly participated in any fraudulent schemes of the late Mr Brett Kebble. Equitant was duped into participating in a fraudulent transaction,” the company claims.
”For the record, Equitant, whose directors are youth activists Messrs Songezo Mjongile and Lunga Ncwana who have not benefited a cent from the transaction, have been making headlines which have been insinuating wrongdoing on their part whereas there is no mention of a single name of the individuals the rest of the
R268-million went to. All assets credited to Equitant have been returned.”