Paralysed mining company Aurora Empowerment Systems has cheated collapse once again after a year of surviving on little more than its political clout.
Last Friday Judge Frances Legodi granted a liquidation application brought against Aurora by Protea Coin Security in the North Gauteng High Court.
But by Tuesday the company had again managed to stave off disaster when it reached an agreement with the security firm, which did not oppose Aurora’s application for the cancellation of the order.
Aurora is headed by Nelson Mandela’s grandson, Zondwa Mandela, and President Jacob Zuma’s nephew, Khulubuse Zuma.
Protea Coin was granted a winding-up order against Aurora in respect of a claim of R12-million in outstanding payments for services rendered since October last year.
While the court order for liquidation may be set aside, the application contains details of Aurora’s financial woes — of bouncing cheques and fake deposit slips.
Protea Coin has been securing the Grootvlei and Orkney operations since Aurora took control of the liquidated Pamodzi Gold mines a year ago.
It halted its services in May, after months of Aurora defaulting on payments.
The company has been in the spotlight since March, when workers at both operations downed tools and rioted after not being paid their wages for two months.
Aurora has faced major problems since taking control of the mines, including water pollution, theft of cables and operational equipment and illegal mining, but the main cause of the crisis has been its failure to secure funding.
Protea Coin’s liquidation application describes how it entered into a verbal agreement with Zondwa Mandela in October last year to provide security services for the mines but, when it came time to pay up, Aurora’s cheques bounced.
According to Protea Coin’s founding affidavit, “the post-dated cheques dated 15 February 2010, 15 March 2010, 15 April 2010 and 15 May 2010 were all dishonoured for payment by virtue of insufficient funds available in the account of the respondent”.
Protea Coin also accused Aurora of fraud, for producing proof of payment documents for payments that were never made.
The affidavit states: “On 24 February 2010 … the respondent handed to … the applicant a document purporting to be proof of payment of the amount of R781 355.05 by way of electronic transfer into the applicant’s bank account. The purported documen- tary proof of payment proved to be a fraudulently generated document as no payment was received by the applicant or any portion thereof.”
In a letter from Mandela to Nicolaas Viviers, the attorney acting for Protea Coin, in March, Mandela blames the department of mineral resources for Aurora’s financial troubles.
“Unfortunately the company is in the position that it is owed large amounts of income and subsidies from the South African government and its relevant departments due to its community responsibilities, including that of underground water pumping,” he says.
‘Monies owed have been long outstanding and promised for payment which caused a severe cash flow shortage.”
However, according to the department’s spokesperson, Jeremy Michaels: “The DMR does not have a relationship with Aurora as the joint liquidators are legally responsible for the mine. The mine is not operational therefore the mine does not qualify for the subsidy.”
Petrus van Niekerk, the chief executive of Protea Coin, would not comment on the details of the agreement. “You know what Aurora’s financial situation is,” he said.
“The agreement is not necessarily payment — they’ve spoken to us about making some commitments and we’ve given them ultimatums.”
A source with knowledge of the agreement said Aurora had been given a month to come up with the R12-million and the company had promised that an unnamed Chinese consortium would invest in it.
Van Niekerk would not comment on why he trusted Aurora’s assurances after months of their default- ing on payments.
He denied that he had been placed under pressure, political or otherwise.
Gideon du Plessis, the spokesperson for workers’ union Solidarity, said Aurora employees were unaware of the liquidation and were confused by the alleged appearance of board directors on the mining sites.
“I heard that there was a rush from the Aurora directors to the mines looking for assets … because they made an agreement with Protea and needed to raise the funds to pay,” said du Plessis.
Aurora has another liquidation application waiting in the wings. Copper Eagle Trading 108 launched an application in the North Gauteng High Court on September 15 for R10-million allegedly owed to it for gold-bearing material.
Ian Cousins, the chief executive of Copper Eagle, said on Wednesday that Aurora had notified him if their intention to oppose the application.
“My lawyers are busy with an urgent application because we’ve heard that [Aurora] are selling headgear and material and scrap metal off the mines.”
The Mail & Guardian reported last week that Aurora was stripping the mines of scrap metal and selling it to the New Reclamation Group, allegedly without the approval of the liquidators.
There is still no sign of the R1.2-billion that the company announced would be injected by Swiss funders Global Emerging Markets (GEM).
Divisions within the liquidatiing team have also become apparent, with sources close to the team describing growing resentment about head liquidator Enver Motala’s alleged non-disclosure of information to the rest of the team, which he strongly denies.
A source close to the team has described GEM’s funding and the Chinese consortium as “pie in the sky” and claimed that not all the liquidators shared Motala’s faith in Aurora.
Lesiba Seshoka, the spokesperson for the National Union of Mineworkers (NUM), said that Aurora workers who had not been paid in full since May were surviving on donations from the union.
He said that Aurora had not been criticised for its activities because “politically connected people” were in prominent positions in the company.
After the M&G reported earlier this year that Aurora had been deducting a percentage of workers’ wages for UIF but not paying it to the fund, the NUM laid a complaint against the company with the department of labour.
“Why has nothing happened?” asked Seshoka. “This tells you the story of a government fearful of some of its citizens.”
Michael Hulley, the spokesperson for Aurora, said that he did not “have the inclination to respond on a weekly basis to what appear to be allegations which are intent only on bringing the company into disrepute”.