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The new controlling shareholders of Vantage Goldfields have given business rescue practitioner Rob Devereux an ultimatum to resign or face a court application to push him out.
Devereux, who was appointed to rescue Vantage and its two gold mines – Lily and Barbrook in Louisville near Barberton – in 2016, has been under pressure from the Barbrook creditors’ committee for more than a year to quit because he failed to get investors to buy the operations.
After getting an investor, Siyakhula Sonke Empowerment Corporation (SSC), the committee was also dissatisfied that it was not given proof to show that money had been deposited and said there was a lack of accountability.
It also levelled allegations of neglect against Devereux, saying that the mines had become a playground for zama zamas.
Even after SSC bought a 74% stake in the company early this year after securing R190 million from the Industrial Development Corporation, the committee pursued its liquidation application against Vantage.
The two mines went belly up after one of the entrances at Lily Mine collapsed on February 5 2016, temporarily trapping 75 workers and killing three.
The mines were shut down immediately after an instruction from the department of minerals resources because of the unstable surface.
Now, SSC has also joined the creditors’ committee to force Devereux out.
SSC CEO Fred Arendse said that Devereux had to leave because they could no longer work together due to a breakdown of communication and trust between him, the SSC and creditors.
Arendse said it was the last straw when SSC discovered that there was gold in the tailings dam that could generate R549 million in revenue, but Devereux did not disclose the information and did not embark on a project to extract the gold, even though he found out it was there almost three years ago.
“Some of the key contentions and reasons for the current standoff between the business rescue practitioner and SSC Group is his [Devereux’s] inability to account for the spending of SSC Group’s post-commencement funding, his failure to disclose the project to SSC from the onset and his failure to undertake the project, albeit that it has been at his disposal for the duration of the almost three-year business rescue process and has the potential to rescue the entire business,” said Arendse.
He added that Devereux had:
. Introduced SSC Group to supposed shareholders that placed a greater financial burden on the business rescue process and the SSC Group, instead of raising additional funding as agreed;
. Discussed and questioned SSC Group’s financial and technical abilities among third parties;
. Been inaccessible and uncommitted; and
. Engaged in “secret dealings” that were not done in the best interests of the company and had had “a detrimental effect on all of us”, especially the former employees and members of the community.
“We need to clean this mess. If things were done differently, these mines would have been in operation three years ago,” Arendse said.
Devereux challenged Arendse to substantiate his allegations.
“If he has a problem, he must go to court and remove me,” said Devereux.
Daniël Lourens, a lawyer for M&R Oil, one of Lily Mine’s creditors, has threatened to pursue the liquidation application solitarily or in conjunction with other creditors if Devereux is not removed.
“We have perused the business rescue plan, all the progress reports, emails and notices received by my clients to date, and it is apparent that Mr Devereux has clearly failed in discharging his mandate to rescue [the] mines, which has resulted in the current state of affairs, with various parties even alleging damage to the plants and devaluation since Mr Devereux’s appointment,” Lourens said.
“It seems apparent that he employed a variety of delay tactics in the business rescue process (whether it was to inflate his fee account or whatever other reason, we don’t know) and the process has long exceeded the statutorily envisaged time span for any business rescue,” he added.
