Business

Lily Mine court battle enters another round

2019-07-22 13:42

The Siyakhula Sonke Empowerment Corporation (SSEC) will appeal a high court decision that dismissed its application to force Vantage Goldfields SA (VGSA) to hand over shares of the Lily and Barbrook gold mines in Mpumalanga, giving the SSEC ownership of these operations.

The SSEC’s subsidiary, Flaming Silver Trading 373, reached an agreement with VGSA in March to buy a 74% stake in the company after it was placed under business rescue, but VGSA changed its mind and cancelled the agreement, alleging that the SSEC did not have the funds.

However, the Mbombela High Court in Nelspruit did not make any judgment this week on the SSEC’s main application to claim the shares.

The court ruled on Wednesday in favour of former SSEC director Ferdi Dippenaar, who applied to declare the signing of a fourth addendum to the sale agreement between the SSEC and VGSA null and void.

The SSEC had not indicated when it would file its appeal but it had decided to appeal the decision.

Dippenaar argued that the meeting that took the resolution regarding the addendum was not correctly constituted – a point the SSEC disputes.

The judgment automatically collapsed the deal.

“We will apply for leave to appeal this judgment and it is important to note that we did not lose this case based on the merits of our main application, but as a result of the judgment granted in favour of Dippenaar,” said SSEC CEO Fred Arendse.

“We are surprised by the judgment handed down, but we will not give up.

“This judgment made no mention of the lack of funding and any other merits of the main application, but this is as a result of its automatic dismissal given the impact of Dippenaar’s intervention application,” Arendse said.

He said his company had the funds.

The business rescue practitioner’s report concurred with him.

VGSA CEO Mike McChesney said the company would approach the mineral resources department with a proposal on the way forward.

“As a result of the court judgment, VGSA can now move forward with purpose and finalise the funding arrangement to complete the business rescue of the companies.

“Meetings are scheduled with the new investors and the joint business rescue practitioners to cement a new sale agreement for the benefit of all stakeholders,” McChesney said.

The mines were closed after the entrance to Lily Mine collapsed in 2016.


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October 13 2019