Mining house Lonmin has been accused of covering up for its black economic empowerment (BEE) service provider, which has been accused of fronting.
The joint venture company, Great Lonmin Community Commodity Specialists (GLC), has invoiced the mining company for more than R160-million but has paid its BEE shareholders only R26 000 in the past four years, according to the BEE partner, Bana Ba Bapo Mining Contractor.
These allegations are in an affidavit that forms part of a complaint sent to the Broad-Based Black Economic Empowerment Commission. The complaint was lodged by Bana Ba Bapo, which partnered with Christiaan van den Heever in GLC. Bana Ba Bapo has also accused Van den Heever of paying family members from the company’s funds.
Van den Heever said the allegations were unfounded.
Although the commission would not confirm that a complaint had been lodged, the Mail & Guardian has seen a letter from the commission confirming that it is investigating the matter.
Commissioner Zodwa Ntuli said the commission was currently investigating more than 300 cases of fronting that have been reported since June 2016. If a company is found guilty it can be fined up to 10% of its annual turnover and its directors or those involved could be jailed for up to 10 years, she said.
Bana Ba Bapo board member Katlego Mataboge said the joint venture started working for Lonmin in 2014 and invoiced Lonmin for work relating to “universe raising, drop raising … construction and development since the year 2014 at K3 and Saffy Shaft”.
Van den Heever owns 49.9% of the company and Bana Ba Bapo the rest. “There are five board members on GLC, with 80% women, and, though we are meant to have regular meetings and updates about finances, this has not happened unless we call for a meeting,” Mataboge said.
Another board member, Jeff Ramokgadi, said: “The only dividends we received were in 2016 when Chris gave us R26 000 to share amongst five of us. When we asked questions, he said the company wasn’t making any money and that we needed to sign papers which would see him own the company. We refused,” said Ramokgadi.
This was confirmed by a third member, Elizabeth Kaise, who claimed Van den Heever had refused to give them the company’s audited financials for the four years.
“Chris sweet-talked me and others to go into a joint venture with him knowing that without us he would no longer get work from Lonmin. But, when it came to us asking about the financials, he told us that we weren’t even contributing to the company.”
Kaise said each board member was paid R5 000 a month.
“He did that for about a year, then last year he said the company was in distress and the talk of liquidation started,” Kaise said.
She said she approached Lonmin and asked it to investigate.
“They said they would but we never heard anything from them. I think Lonmin is just covering for Chris because, if they weren’t, they would show us how they investigated him and what came of it,” she added.
Van den Heever refuted this and said: “Lonmin had done an in-depth forensic investigation regarding the same claims in 2017. The findings clearly indicated that, out of the then five members of Bana Ba Bapo, the two ladies who did not want to participate in GLC but just wanted handouts were the ones that lodged the complaint. The other three clearly indicated that the claims were unfounded,” he said.
He added that it was “a direct attack against the company and myself and we have reverted to legal advice and action”.
When asked to answer specific allegations, he said he had been advised by Lonmin and his lawyers not to speak to the media.
Mataboge also alleged that Van den Heever has been running the company as a family business. The M&G has seen documents showing payments by GLC to a Mr van den Heever who was born in 1996 and a Mrs van den Heever born in 1969.
“I don’t know what work they do for our company but either way it is wrong and it’s nepotism. The money to run this company is being spent on paying his family,” Mataboge said.
After a meeting between Lonmin and Bana Ba Bapo lawyer Andries Nkome two weeks ago, Lonmin agreed to reopen the investigation.
“Gwede Mantashe [the mineral resources minister] must stop the road shows on the mining charter preaching an increase in mining participation by black people whilst compliance lags behind,” Nkome said. “This is just one of many cases at mines where black people are used so that white people continue to have the lion’s share of the dividends of mining. The state must ensure compliance of the allocated profit sharing quotas because the mining sector is where racism, apartheid, and exploitation are entrenched.”
Wendy Tlou, Lonmin’s group head of communications, said the company had investigated the case last year and found no evidence of fronting but, because of new information, they would investigate further.
Meanwhile, the shareholders are concerned that the investigations will take too long, by which time Van den Heever might have liquidated the company.
According to the complaint before the commission, he recently told some of the shareholders the company has to be liquidated because it owes money to the South African Revenue Service.
“Van den Heever has previously run a BEE venture that he liquidated under mysterious circumstances because it apparently owed the South African Revenue Service,” reads the complaint.
Mataboge said Van den Heever was constantly harassing her and other members to sign off on the liquidation.