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20 Jan 2012 00:00
The appointment of Lulama Mokhobo as SABC group chief executive is dogged by the virtual collapse of a mining company she chaired—and controversial Thai billionaire Thaksin Shinawatra played a key role in its meltdown.
Shinawatra stands accused of reneging on an ‘irrevocable” agreement to inject more than R100-million into Miranda Minerals and hijacking the board of the company, sparking a court action.
At the same time there are counter-allegations that the company’s balance sheet was misrepresented by its previous management to reflect R285-million worth of assets it does not own.
According to Miranda stock exchange announcements since October, when Shinawatra-linked directors already held significant sway, the mining company’s previous management effectively misled investors by falsely claiming that it possessed prospecting rights to Rozynenbosch in the Northern Cape, which contains valuable zinc, lead and silver deposits.
Mokhobo was appointed a Miranda non-executive director in December 2005, barely two weeks before the company was listed on the JSE, and was elected chairperson in April last year, shortly after Shinawatra directors were first appointed to the board.
Share collapseThe ensuing struggles resulted in the effective collapse of the company’s share price from about 70 cents to 19 cents last week, when trading was suspended. Mokhobo then joined four other directors in resigning.
Communications Minister Dina Pule announced Mokhobo’s appointment as the SABC’s new chief executive on Tuesday, a day after she quit Miranda’s board.
No official reason was given for the resignation.
But a source close to the board said that members felt frustrated by court interdicts obtained against the company by its former chief executive, Ron Nel, because this prevented them from taking any business decisions until the legal dispute was settled.
The company has been locked in a court battle with Nel, who applied for a business rescue under the Companies Act in July last year.
Miranda’s stock exchange announcements claiming misrepresentations by the former management appear to flow from this probe.
Business rescueIn papers Nel filed in the North Gauteng High Court to motivate for the business rescue procedure he describes how Shinawatra’s company, Global PS Telecom Investment, concluded an irrevocable agreement in the form of a “clawback offer” to plough R108.6-million into the troubled firm in August 2010 in return for shares. Flowing from this, Global received three seats on the board the following March.
A copy of the agreement filed by Nel indicates that Shinawatra signed it on Global’s behalf, even though Global is understood to argue that he is not actually a shareholder.
Nel states that Global never honoured the deal and instead seized greater control of the company by buying shares from a black empowerment shareholder, the Yakani Group.
Nel claims that through this transaction, which, according to a stock exchange announcement, made Global the single-biggest shareholder at 24%, as well as further short-term loans convertible to equity, the company attempted to increase its shareholding at a cheaper price than would have been the case under the claw-back agreement—and without the same recapitalisation benefit to Miranda.
In his application for the business rescue Nel claimed that Miranda had been left “financially distressed and the majority of its directors severely conflicted”.
But an opposing board member, who spoke anonymously, said Nel’s opponents on the board had opposed the rescue plan because it was not in Miranda’s best financial interests.Repayment demandLast week, following Nel’s successful interdict pending a full hearing of his business rescue application, Global and Yakani demanded the repayment of their multimillion-rand loans to Miranda.
Mokhobo, who also chaired Miranda’s remuneration and audit committees, defended her record this week, saying she was not directly involved in negotiating deals and claiming that its management had concealed information from the board. She said the board had instituted the forensic investigation that revealed gross malpractice, leading to Nel’s suspension in September.
Apparently flowing from this, Miranda put out a stock exchange announcement in October last year. It said the company had applied to the department of mineral resources for the conversion of its old-order prospecting rights at Rozynenbosch before it was listed on the JSE.
However, the renewal of the rights was refused in 2006, whereas on October 5 the department had told Miranda at a meeting that they had been allocated to a third party.
Despite this, the rights, valued at R284-million, had remained on the balance sheet. As a result the net asset value of the shares for the year ending August 2011 was expected to be as much as 89% lower than the same reporting period for the previous year.
Removed“The board is of the view that the company should have removed the prospecting right in the amount of R284-million as an asset on its balance sheet commencing in 2006, in the financial year in which it was refused,” the statement said.
As a result, Miranda restated its net asset value per share to be only about 14 cents, instead of the 124 cents previously stated. A second announcement in November last year gave details of further irregularities at the company.
Contacted this week, Nel said the contested asset should not have to be removed from the balance sheet “because that’s where it is supposed to be. We have the asset and own the title. The minister must just convert the old-order right into a new-order right,” he said.
Edward Sante, general counsel for Global, would not comment on the dispute this week beyond urging the Mail & Guardian to read the stock exchange announcements.
They are understood to argue that “previous management”—a clear reference to Nel—had misled shareholders and investors about the company’s assets.
Mokhaba is a former group executive at the SABC. She headed both the SABC1 and SABC2 television channels as well as the broadcaster’s 16 radio stations.
She is also a former producer and chair of the Independent Producers’ Organisation and serves on the board of trustees of the Nelson Mandela Children’s Fund.
A telecommunications billionaire, Thaksin (62) founded Advanced Info Service, Thailand’s most successful cellphone operator, in 1986.
He started the populist Thai Rak Thai (Thais Love Thais) party in 1998 and, after winning the 2001 election, became Thailand’s first prime minister to serve a full term.
After more than five years in power, in September 2006, following protests by the People’s Alliance for Democracy, he was ousted by a military junta while he was out of the country. The junta later called itself the Council for National Security.
The council accused him of corruption and fraud. Charged in absentia with conflict of interest in that he had failed to make a full declaration of assets totalling 76-billion baht, he was convicted and sentenced to two years in jail.
Unusual wealthAn assets-examination committee appointed by the council froze Thaksin’s and his family’s assets in Thailand, accusing him of becoming unusually wealthy while in office.
Amnesty International criticised his government’s human rights record.
In a roundup of Muslim protesters critical of his leadership some are alleged to have died from suffocation while being transported in overcrowded, poorly ventilated trucks. Thaksin subsequently issued an apology.
His government was also accused of restricting media freedom.
Thaksin’s lawyer, Noppadol Pappama, said the claims of human rights abuses were completely unfounded and there was no solid evidence against him.
The Red ShirtsThaksin is a supporter and the alleged bankroller of the Red Shirts United Front for Democracy against Dictatorship (the “Red Shirts”) whose prolonged street protests ended after bloody clashes with the military in 2011.
Thaksin often appeared on a giant television screen to give his supporters encouragement.
The Thai government revoked his passport for his role in the Red Shirts protests.
He has since been in self-imposed exile, mostly in London or Dubai. — Selma Shipanga
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