One of the backers of Aurora Empowerment Systems appears to be a crook who defrauded banks of millions of rands at his previous business.
Aurora is the company led by Jacob Zuma’s nephew, Khulubuse, and Nelson Mandela’s grandson, Zondwa, that has been struggling to raise funds to get into the mining business.
Aurora was selected as the preferred bidder to buy the assets of liquidated empowerment company Pamodzi Gold, but the deal is on the point of being cancelled because Aurora has not secured promised funding.
The Mail & Guardian can reveal that Tony Chammas, described as “working for Aurora in the finance department”, was involved in a scam where business assets were double-financed by different banks, using false invoices provided by a crooked supplier. Money from these fraudulent transactions — amounting to more than R7-million — was paid into his personal bank account.
Chammas’s role at Aurora is unclear. His son’s company, Woody Diamonds, was described as one of Aurora’s “principal funders”.
A minority shareholder in Aurora said Chammas was “neither a director nor a shareholder” but conceded Chammas was involved in another Aurora initiative to purchase a stake in a Northern Cape diamond mine.
The shareholder declined to name the mine, but the M&G has established from two independent sources that the mine in question was the Schmidtsdrift mine. It is understood that, as in the case of Aurora’s gold interests, the company was not able to come up with the funding after its Malaysian backers, AM Capital, withdrew.
Chammas’s role was also important enough for him to be included in the Aurora delegation that held a crisis meeting with the Pamodzi liquidators two weeks ago at which they were given an 11-day ultimatum to come up with funding or lose the deal.
Zondwa Mandela, Solly Bhana and Chammas were said to be representing Aurora and were described as “particularly confident” that they would soon have the funds to conclude the deal.
The M&G has previously disclosed that the Bhana family was involved in insider trading offences in 2 000 relating to a now liquidated company, Amlac, which resulted in a R12-million fine.
Now it appears that Chammas was involved in much more serious activities via another company, Intuitions Quality Flowers, which was liquidated in 2008 with debts exceeding R35-million.
Intuitions was launched amid fanfare in November 2006, with R24,3-million in funding from the Development Bank of Southern Africa (DBSA) and another R30-million in loans from other institutions.
It was going to export flowers via a state-of-the-art hothouse estate constructed at Tarlton near Mogale City.
A DBSA press release boasted that more than 500 people, mostly local women, would be permanently employed at the project but, by April 2008, the company had been placed in liquidation and Chammas — originally from Lebanon — had left the country, with a trail of creditors snapping at his heels.
At a subsequent insolvency inquiry, the man who had assisted in defrauding the banks, Pieter Bredenkamp, testified under oath that he had created false invoices for heating equipment for the Intuitions hothouses.
On the strength of these invoices Chammas had obtained funding from various banks that was then paid into Bredenkamp’s company account to pay for the equipment — most of which was fictitious.
According to a forensic investigation of Bredenkamp’s company accounts, he received more than R11,3-million in financing from at least four banks, of which R7,6-million was paid into Chammas’s personal bank account as soon as the money flowed into his company’s account.
Bredenkamp reached a settlement after one of the banks applied for his sequestration, but Chammas still has to face the music.
According to a statement issued by the DBSA: “The book-keeping undertaken by [Intuitions] was poor. The forensic audit concluded that there is insufficient evidence to sufficiently substantiate criminal charges by the DBSA. Mr Chammas, however, has not appeared in front of a Section 417 Insolvency Inquiry as he left the country before liquidation. It is the intention that he be summonsed to appear in front of a Section 417 Inquiry.”
Liquidators say their investigations are continuing, but they would like to trace Chammas. They were unaware he was working for Aurora.
Attempts to reach Chammas on a cellphone number supplied by Aurora were unsuccessful.
On Thursday Aurora announced it had secured a R725-million investment from New York-based Âcompany Global Emerging Markets. The investment is conditional on Aurora listing on the JSE, the Âcompany said.