Aurora charged with polluting nearby river

The net is tightening around embattled empowerment company Aurora as it struggles to hold on to the liquidated Pamodzi Gold mines in Springs and Orkney.

The Mail & Guardian can reveal:

The Blue Scorpions, the Water Affairs Department’s environmental crime investigators, laid criminal charges against the directors of Aurora on Thursday morning for their continuing pollution of the Blesbokspruit, the river next to the Grootvlei mine in Springs;

  • Foreign businessmen are suing Aurora and its advisers for bounced cheques worth R9-million;

  • An audit of Aurora’s management of the mines and gold sales requested by the liquidators is in full swing;

  • Aurora’s assurer, Rand Mutual, cancelled the Grootvlei mine policy this week, putting workers at risk;

  • Aurora again reneged on an agreement with the unions that workers would be paid last Friday and it is in hot water with the department of labour over its conduct;

  • New Aurora investor Global Emerging Markets (GEM) is still months away from paying the promised funds to Aurora and the liquidators still have not received a final funding agreement between GEM and Aurora; and

  • Next week the liquidators will meet the Hong Kong-based and listed gold producer Grand TG Gold Holdings Limited and its partner Virgile Mining, based in Welkom and headed by businesswoman Hettie Fourie.

The Grootvlei mine has closed and no gold mining is taking place at the moment, while workers still wait for two months’ outstanding salaries.

Mining at Orkney is also at a standstill and only care and maintenance are being conducted by the remaining staff.

Aurora administers the mines of the liquidated Pamodzi Gold group, but has been running on empty amid allegations of financial mismanagement.

The M&G has exposed questionable payouts to advisers of the mine who have dubious financial backgrounds.

Jacob Zuma’s nephew, Khulubuse Zuma, and his lawyer, Michael Hulley, with Nelson Mandela’s grandson, Zondwa Mandela, feature on the Aurora board, giving the company heavy political clout and black empowerment credentials.

Two weeks ago Hulley announced with huge fanfare that GEM would be stepping in as saviour of the ­embattled group.

But Aurora emphasised that the promised R725-million investment from GEM could be accessed only if Aurora lists on the JSE.

Aurora is looking to reverse its assets into the shell of listed Labat to give it the listing it needs, but insiders suspect the deal could still take months to reach completion. JSE sources also said that with Aurora’s reputation it would struggle to complete the listing.

Liquidator Enver Motala confirmed that an audit is taking place to inform the liquidators about Aurora’s gold sales and how much gold has been mined and sold. Motala said the audit was more of an “accounting audit than a forensic audit”.

The liquidators are already eyeing another deal if Aurora does not come up with the promised funds, though Motala did not want to be tied to a deadline for the company’s removal from Pamodzi mines.

He confirmed that the liquidators would meet Grand TG next week to examine a bid that the consortium is expected to put on the table.

Grand TG is conducting due diligence and is expected to submit a competitive bid.

On Thursday the Blue Scorpions laid criminal charges against Aurora’s directors for failing to treat acid mine water flowing into the Blesbokspruit and endangering critical wetlands.

The department has warned that the pollution is a potential environmental catastrophe.

Marius Keet, deputy director of water quality management, said Aurora has failed to treat the acid mine water being pumped from the mine.

“Continuous pumping is important to avoid flooding of the gold reserves,” Keet said. “The quality of the underground water, if untreated, is unacceptable and should not be discharged into any water course.”

He said the department is considering a court interdict against Aurora if the problem persists.

This week the Grootvlei mine’s assurer, Rand Mutual, cancelled Aurora’s policy on the mine after sending countless letters of demand for payment. This means that workers, who are still maintaining the mine without being paid, will not be covered in the event of an accident.

The M&G was informed that a notice of a motion had been served on Aurora by the labour department over its failure to pay workers. Gideon du Plessis, a union representative, said he was not surprised that Aurora had again failed to pay workers’ outstanding salaries.

“They promise, but they never deliver,” he said. “For them workers are simply commodities to be traded for more money. There is no humanity.”

Aurora’s financial director, Thulane Ngubane, declined to respond to the M&G‘s questions.

Zondwa Mandela and the bounced cheques worth R7m

Aurora and its advisers are facing legal action over bounced cheques for R7-million issued to two businessmen.

Court papers seen by the M&G show that the company and its advisers are involved in two court actions in which its director, Zondwa Mandela, allegedly signed large cheques that could not be honoured because of insufficient funds.

The M&G understands that some of the failed Aurora payments were made to service personal loans made to Aurora advisers Suliman “Solly” Bhana and his son-in-law, Feroz Essay.

Last month Dubai businessman Faruk Roked had a summons issued by the registrar of the South Gauteng High Court against Bhana and Essay.

Roked claims that they owe him in excess of R6-million, which he lent to them in 2009 in United States dollars and Dubai dirhams.

The summons includes a signed acknowledgement of debt, in which Bhana and Essay agreed to repay Roked in increments of R35 000, R50 000 and R80 000.

It is understood that the Bhanas attempted to pay Roked with Aurora cheques made out by Mandela to “cash”. But the cheques bounced and the case will be heard in the South Gauteng High Court in early June.

Roked declined to comment when contacted in Dubai this week, claiming that the case is confidential.

The second case involves another businessman, Adam Dudhia, who is suing Aurora for non-payment of R900 000. Dudhia also refused to comment on the matter.

A source in Aurora disclosed that although R80 000 of the loan was made to Solly Bhana and his family, the entire loan was repaid with Aurora cheques, also signed by Mandela. This case will also go to court at the end of June.

Bhana’s attorney, Howard Woolf, said: “Aurora is repaying loans made by Mr Adam Dudhia to Aurora — Neither Mr Mandela nor Aurora is paying our clients’ personal loans.”

Essay told the M&G that the Aurora cheques are “totally separate to our personal debt”.

On the Roked matter, Essay said he had “no idea” about the issuing of Aurora cheques. He was also unaware of the court summons.

Zondwa Mandela and financial director Thulane Ngubane did not respond to the M&G’s questions before the newspaper went to print.

Yolandi Groenewald
Yolandi Groenewald
Yolandi Groenewald is a South African environmental reporter, particularly experienced in the investigative field. After 10 years at the Mail & Guardian, she signed on with City Press in 2011. Her investigative environmental features have been recognised with numerous national journalism awards. Her coverage revolves around climate change politics, land reform, polluting mines, and environmental health. The world’s journey to find a deal to address climate change has shaped her career to a great degree. Yolandi attended her first climate change conference in Montreal in 2005. In the last decade, she has been present at seven of the COP’s, including the all-important COP15 in Copenhagen in 2009. South Africa’s own addiction to coal in the midst of these talks has featured prominently in her reports.

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