The report found that Khulubuse Zuma in all probability had not been aware of fraudulent misrepresentations contained in the bid document for Pamodzi.
Khulubuse Zuma claims allegations levelled against him by trade unions distort the findings a 2013 inquiry into the affairs of Pamodzi Gold.
“Zuma wishes to record that he has noted statements attributed to the Cosatu [Congress of South African Trade Unions] and NUM [National Union of Mineworkers] leadership, castigating him for taking steps to protect his rights and blaming him for the plight of the mineworkers who were employed by Pamodzi,” his spokesperson, Vuyo Mkhize, said in a statement on Friday.
“These statements seek to distort the findings of the report that was filed by advocate WW [Wayne] Gibbs, the commissioner who was tasked by the Master of the North Gauteng High Court to conduct an inquiry into the affairs of Pamodzi, on 21 September 2013.”
The report found that Zuma in all probability had not been aware of fraudulent misrepresentations contained in the bid document for Pamodzi.
Not exhonerated
However, the inquiry did find that this did not exonerate him.
“I find Zuma was not aware that the terms of the bid document were false, but that by the exercise of reasonable care, the care expected of a director in his position, he would in all probability have been aware of the fraudulent misrepresentations contained therein,” Gibbs said in his report.
“Although one has sympathy with Zuma, the fact that he trusted his associates (which explains his laissez faire approach and lack of control), was allegedly also defrauded and lost millions of his personal wealth, this does not exonerate him from his statutory duty of care towards the company and to my mind he was negligent in his approach, as envisaged by sections 77 and 76(3)(c) of the new Companies Act.”
He found that this could have been avoided had Zuma kept an eye on the management of the company.
“One should not lose sight of the fact that the other directors, unlike Zuma, did not merely fail their duties to be diligent, but actively participated in misrepresenting facts to the JPL [joint provisional liquidators] and embezzling assets belonging to the companies, thereby resulting in them being liable to the companies directly in terms of section 424 of the old Companies Act and or delict.”
Negligent
Mkhize on Friday said Zuma was aware that he had to answer to the fact that he was negligent as a director of Aurora Empowerment Systems. However, he was not party to alleged acts of fraud, theft or asset-stripping insofar as the conduct of Aurora’s business was concerned, as the inquiry found.
In 2009, Aurora was appointed by liquidators to manage Pamodzi’s mines in Springs and Orkney after the company went bankrupt. Aurora allegedly stripped the mines of infrastructure and left its employees without pay and surviving on handouts.
Earlier this week, an urgent application by Zuma to have claims of over R1.5-billion against Aurora set aside was dismissed by the high court in Pretoria.
Judge Eberhardt Bertelsmann dismissed the application with costs. He found that Zuma’s interests were not directly affected.
Stripped assets
Aurora’s liquidators want to go to court to hold the company’s directors responsible after they allegedly stripped the assets of the liquidated Pamodzi Gold’s mines in Springs, Gauteng, and Orkney, North West. The case is due to be heard on March 23.
Mkhize said: “The net effect of this is that Zuma is expected to appear before court on 23 March 2015 to face a demand that he pays upwards of R1.5bn to settle a ‘debt’ whose basis has never been outlined and in circumstances where he will not be allowed to question its very existence or validity.
“Naturally, Zuma believes that this state of affairs offends the principles of natural justice and the right to a fair trial.”
Zuma had instructed his lawyers to explore all available legal avenues to ensure that his constitutional rights were protected, Mkhize said. – Sapa