JOHANNESBURG (miningwekly.com) – Fraud-hit JSE-listed Sentula Mining said on Friday that its forensic audit had succeeded in fully reconciling an errant equipment-related R68-million, but that the source of a deposit of R24,1-million into an undisclosed account was still unknown.

Sentula CEO Robin Berry told Mining Weekly Online that certain civil actions that Sentula was bringing against certain individuals had "progressed to administration", but that, at this stage, nothing more could be reported on the simultaneous criminal case, which was in the hands of the South African Police Service.

"We have made a huge amount of progress in reconciling the instalment agreements to the amounts that we have received to the extent that the R68-million is now fully reconciled.

"The only outstanding issue is the fact that we received a deposit of R24-million into that account, for which we don't have the source. We know where it came from, but we don't know on whose behalf it was paid in," Berry added.

However, he did not believe that the mystery R24-million was a potential liability going forward because of the time that has lapsed since it was deposited.

"It was deposited before the account was closed in 2008 and one would assume that if someone had put that amount of money into our account erroneously, they would have been banging our door down by now," Berry explained.

He said that R24-million over the earnings of the company was still fairly substantial if that had to be brought to book under further liability, but this was extremely unlikely.

When the JSE permitted Sentula to relist its shares after trading in them was suspended in December, Sentula was obliged to renew or lift its cautionary on Friday, which it decided to renew.

"We would only feel comfortable lifting it once all the issues in the original cautionary were sorted out," Berry said.

Those against whom civil action was being brought would be identified once they appeared in court, which in at least one of the instances was likely to come to court this year.

"But I don't think that we could wrap up all of the civil cases this year," Berry added.

Criminal charges had been laid against individuals at police stations relevant to the particular alleged crimes.

Sentula's share price fell 9,43 % to R4,80 on Friday, when 439 399 shares were traded in 36 deals.

The company said that its forensic investigation, which centred on an undisclosed bank account in the name of Scharrighuisen Open Cast Mining Pty, had shifted to the recovery of misappropriated assets, as opposed to ascertaining whether the company was exposed to losses of more than the R224-million already provided for in the 2008 financial year-end.

It continued to warn, however, that the outcome of the investigation might still have a material impact on its securities, as the source of the deposit of the R24,1-million was still unknown.

The company and its forensic investigators were taking legal steps to identify this source. Based on the progress made in the forensic investigation and the relatively small magnitude of this remaining deposit, which had not yet been directly linked to the individuals or entities that were recipients of the proceeds from the undisclosed account, this would suggest that to offset that against misappropriated funds would be the likely course of action.

The company did not, therefore, believe that this amount represented a further liability to it.

It said that, in the unlikely event that the R24,1-million being unrelated to the recipients of the proceeds from the undisclosed account, it might represent a potential creditor and a further liability to the company.

However, since the closure of the undisclosed account in March last year, no claim had been lodged against the company for that amount, which indicated that it was likely that this deposit was linked to the recipients of proceeds from the undisclosed account and, accordingly did not represent a further loss to the company.

From the information available to date, the board believed that the full financial impact of the accounting and transactional irregularities had been provided for in the 2008 financial year-end accounts. As the forensic investigation continued and further information became available, amounts that had been written off would be reclassified to the correct line items in the income statement.

As part of the recovery process, the company had instituted civil and criminal actions against individuals and entities that had been implicated by the forensic investigations.

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