When elephants fight, the proverb goes, it is the grass that suffers most.
The 3Â 0000-strong Bakubung Ba-Ratheo community of Ledig in the North West is not unfamiliar with hostility, but the outcome of a boardroom battle at platinum exploration company Wesizwe could leave them more fractured than ever.
The latest round of mining wars at Wesizwe has placed the Bakubung and their equity in the listed exploration company in the middle of the dispute. As a corporate showdown between the company’s old and new guard loomed on Thursday, lawyers were writing letters disputing or defending the appointment of the Bakubung’s two representatives to Wesizwe’s board.
And on Wednesday a case of assault was opened at the local police station after a community member was allegedly attacked when she was suspected of recording a meeting between the traditional council and the royal family.
The Bakubung’s interest in Wesizwe dates back to 2004, when the community was given a 33% stake, or 117-million shares, two directorships and R11-million in cash by the company.
A few days before the extraordinary general meeting on Thursday, the community was split between its support for the Bakubung’s representatives on Wesizwe’s board and a royal family member claiming to be the community’s lawful delegate.
The Bakubung community is represented on the board by the acting kgosi (chief), Ezekiel Monnakgotla, and DJ Phologane, a local ANC politician and businessman, a representation contested by the royal family.
The kernel of the dispute involves a decision by Wesizwe’s board on November 2 to remove the company’s chief executive, Mike Solomon, and chairperson Robert Rainey after corporate governance questions were raised.
After Solomon’s removal:
- He (Solomon) and his sympathisers accused Phologane and the Bakubung’s corporate advisers, Musa Capital, of attempting to ”hijack” Wesizwe through a ”hostile takeover”; and
- Phologane and his supporters accused Solomon of sowing division in the Bakubung to cover up an alleged dodgy ”bonus” of almost R15-million he received and other ”extravagant expenditures”, including his wife allegedly flying oysters from Knysna to Cape Town on Wesizwe’s tab.
Three weeks ago, on November 25, two minority shareholders in Wesizwe who support Solomon requested an extraordinary general meeting to vote for the reinstatement of Solomon and Rainey and for the election of four other directors. These were to be three former Wesizwe board members and prominent Johannesburg advocate Kgomotso Moroka.
The meeting took place to vote on whether Phologane, acting chief executive Nyasha Tengawarima and the acting chairperson, economist Iraj Abedian, should be kicked off the board, as requested by the minority shareholders.
In the background, pressure was increasing on the Bakubung community to take sides. On November 18 Phologane received a letter from attorney Munya Gwanzura, on instruction from the royal family, advising Phologane to step down from ”all capacities” in which he represented the royal family.
Attached to it was an affidavit by Monnakgotla’s uncle, Meshack Monnakgotla, who claimed he was appointed chairperson of the tribal council by Ezekiel Monnakgotla’s late father and former kgosi David Monnakgotla.
Although he signed the original shareholder’s agreement, Meshack Monnakgotla contends that neither he nor the community chose Ezekiel Monnakgotla and Phologane to represent the community on Wesizwe’s board.
On Tuesday the traditional council’s lawyer, Lucas Moalusi, wrote back, saying that in terms of legislation the Bakubung traditional council nominated Phologane to serve on Wesizwe’s board and that he was the community’s legitimate representative.
A community member present at Wednesday’s meeting between the traditional council and royal family said the royal family’s aim at the meeting was to lobby people to vote Phologane off the board and to reinstate Solomon.
The man, who requested anonymity, told the Mail & Guardian he recently saw Solomon visiting Ledig and addressing meetings with selected groups of people at schools and service stations.
Solomon vehemently denied this allegation, saying the last time he visited the community was for David Monnakgotla’s funeral.
Consensus could not be reached and both factions of the community attended Thursday’s extraordinary general meeting, exchanging insults and slurs.
”We will be at the meeting on Thursday,” Roseman Matshoba, a community member, told the M&G. ”We will go in droves. We will vote Phologane off and we will talk until they hear us. Then we will come back and appoint our own directors.”
The M&G has learned that when members of the traditional council asked questions about Solomon’s corporate governance at Wednesday’s community meeting, they were told that the issue ”could not be disclosed to the public”.
”Who says they can sell our shares?” asked Keneilwe Danke, a community member who supports Phologane’s removal. She spent Wednesday afternoon at the local police station after a woman was allegedly assaulted by supporters of the traditional council (and by Phologane) when she took out her cellphone. She was accused of recording the meeting.
”We are left in the dark,” said Andrew Seeri, another community member.
”We don’t know who elected DJ [Phologane] on to the board. They don’t consult us. We don’t see financial statements.”
A hostile takeover?
In 2007 Wesizwe chief executive Mike Solomon approached Musa Capital and three other financial institutions to make representations to the Bakubung on advising them about their equity in Wesizwe.
Musa was chosen by the community and has since advised them on monetising some of the value held in their Wesizwe shares.
Through transactions with Deutsche Bank and the Industrial Development Corporation, the Bakubung Community Development Corporation — a non-profit entity through which the community holds its shares — has raised more than R500-million in cash and still indirectly owns more than 80-million shares in the company.
These transactions, Solomon claimed, constitute a ”hostile takeover” of Wesizwe by Musa and DJ Phologane, a local ANC politician who represents the Bakubung on Wesizwe’s board.
Newsflash
Ousted chief executive Mike Solomon was returned to the board of Wesizwe Platinum on Thursday afternoon at an extraordinary shareholders meeting in Sandton.
Although he won by a narrow margin, getting 51,76% of the vote, Solomon is now expected to return to head Wesizwe until his retirement in a year’s time.
At the meeting DJ Phologane and economist Iraj Abedian were voted off the board. This sees the return of ousted chairperson Rob Rainey and will require the Bakubung community to nominate a director in Phologane’s place.
The meeting was characterised by loud shouting matches between the community’s two factions and reports of a complete lack of corporate governance at Wesizwe during Solomon’s reign.
