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SSC Group claims legal victory with high court ruling on business rescue of Lily, Barbrook mines

7th June 2021

By: Donna Slater

Features Deputy Editor and Chief Photographer

     

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SSC Group, a bidder and creditor for the Lily and Barbrook mines in Barberton, which both remain under business rescue, says “truth and justice” have been won with a court judgment that was handed down by the Mpumalanga High Court on May 31, which it says found that the behaviour and actions of the involved business rescue practitioners (BRPs) were “unlawful and irresponsible”.

The Lily and Barbrook mines have been shut following a collapse of the Lily mine in February 2016 with trapped mineworkers Yvonne Mnisi, Pretty Nkambule and Solomon Nyirenda still unaccounted for.

In a joint response, BRPs Rob Deveruex and Daniel Terblanche tell Mining Weekly that SSC’s labelling of their handling of the case as “unlawful and irresponsible” is a play on words by SSC, as it states nowhere in the court documents that they acted unlawfully and irresponsibly.

Both Devereux and Terblanche state that they have acted on the advice of various attorneys and senior counsel, with their opinions supporting the decision that the BRPs took.

Further, mine owner Vantage CEO Mike McChesney tells Mining Weekly the judgment was a “disappointment” in that it causes further delays to the business rescue process, and that SSC Group’s statement regarding the court case was just another in a never ending stream of misleading statements by them and Arqomanzi.

SSC Group alleges that a collapse of a “crown pillar” was the cause of the Lily mine incident.

SSC Group also alleges that while the mines remain shut, creditors of the mines have been “stonewalled by inconceivable hurdles” thrown against any attempts to reopen the mines, as well as a reluctance to pay creditors what is owed to them, reboot employment and investigate the causes of the collapse.

“SSC Group and its partners have led from the trenches, supporting the rights of both the mine workers and its fellow creditors, in their attempt to retrieve the container and reopen the mines,” the company states in a statement on June 4.

“Vantage has never wavered from its decision to reopen the mines and has continued to work with the BRPs to achieve this,” says McChesney.

He adds that Vantage was ready to proceed to implement its plans in February, at which point the creditors would have been paid.

He also points out that the business rescue plans would have been substantially implemented by now, had it not been for the “incessant litigation pursued by Arqomanzi and SSC”.

SSC Group also states that the BRPs had been “induced” with an R18-million pay-out offered by Vantage on January 20 to “unilaterally amend the voted and agreed-upon business rescue plans of 2016 and 2017”, and to “unlawfully adopt and publish the plans in favour of Vantage and its associates”.

SSC alleges that Vantage, and its owners, are employing “smoke-and-mirrors tactics” to “pull the wool over both the public’s and the court’s eyes” in an attempt to keep the mines closed so as “not to face accountability” for the 2016 incident.

However, McChesney informs Mining Weekly that SCC and its CEO Fred Arendse are trying to impugn Vantage and the BRPs by saying Vantage offered to pay the BRPs R18-million.

The payment, he says, is simply what the BRPs are owed in fees for their work over a period of five years. This statement was echoed by the BRPs in a response to Mining Weekly.

The R18-million figure is an accumulation of five years of business rescue fees, disbursements and legal fees that have accrued between the three companies – Vantage, and the Barbrook and Lily mines, and which, to date, have not been paid.

“Any accusations by SSC that we were induced is untrue,” the BRPs state.

In fact, McChesney avers that Arqomanzi has offered to pay the BRPs even more – R18.5-million – another fact confirmed by the BRPs, who add that such fees were presented to Arqomanzi, which accepted them.

COURT FINDINGS

Further, SSC points out that the Mpumalanga High Court found the BRPs – who are appointed officers of the very same court – acted unlawfully and prejudicially in their actions, disregarding a court order whereby Judge Andre Roelofse, in 2019, ordered the BRPs to publish amended plans and call a meeting of the creditors to vote on said plans.

The latest judgment states that this ruling cannot be disregarded, stating that the BRPs cannot unilaterally amend the previously adopted business rescue plans.

In the judgment, Mpumalanga High Court Judge president Francis Legodi says, “One wonders whether the BRPs, who are officers of the court, did not make themselves guilty of misconduct or contempt of the court.”

He also stated that the decision by the BRPs to ignore the 2019 court order by saying that it had lapsed, was, in his view, “absurd and offensive to the order of Roelofse. It is almost like saying: ‘I let the order run its course by not complying therewith, and therefore I am entitled to do as I deem fit’”.

In defence of this, McChesney says the BRPs could not implement the previous order of the High Court entirely as a result of Arqomanzi’s delays in providing any plan that could legally be implemented and the fact that it did not provide the necessary funding.

The BRPs state that they were merely implementing the plans that had already been voted on and adopted by the creditors.

“This follows a failed attempt by SCC and its associates to buy the Vantage companies in 2017 when they failed to satisfy their obligations, and in particular failed to provide funding to reopen the mines, after which Vantage terminated the sale agreement.

“They have a record of not complying with their obligations and resorting to incessant litigation,” he says.

McChesney adds that, under Arqomanzi’s proposal, creditors would not be paid “even a rand” and no work to reopen the mine would start for a year or more, because they simply have not provided proof of funding to implement their proposal.

Legodi further stated that court orders cannot simply be ignored, as such an action would encourage disorder and potential prejudice that can turn into lawlessness and a free for all damaging the interest of justice. “It would defeat the very purpose as contemplated in the Companies Act.”

In a statement, SSC says the resulting judgment that the amendments to the business rescue plans are to be published and a meeting of the creditors called to vote on them, is a victory for the rule of law, and a step closer to reclaiming the bodies of the three mineworkers.

However, SSC states that considering how the BRPs and Vantage’s management have acted previously, SSC is certain they will find another way to frustrate progress and cause further delays in the reopening of the mines.

McChesney says Vantage remains determined and fully committed to pursuing the rescue of its companies and the implementation of the business rescue plans, which include the payment of creditors, reopening of both the Lily and Barbrook mines and the recovery of the bodies of the three missing miners.

“[This] will finally bring closure to the bereaved families, as well as immense benefit to employees, the community and creditors, who overwhelmingly support Vantage’s plans,” he says.

“Vantage will continue to seek to implement its plans to pay creditors within weeks and to reopen both the Lily and Barbrook mines,” concludes McChesney.

Arendse, meanwhile, states that SSC has funding in place and that the capability exists to bring these mines back into safe production and restore the dignity of the affected families and all stakeholders.

Going forward, the BRPs inform Mining Weekly that they are consulting with their legal team and considering their position as the judgment is not without its problems.

“On the one hand, Arqomanzi has instituted further court applications which may need to be dealt with prior to a meeting, while on the other hand, the Vantage group of companies have new shareholders [who are] willing to reopen the mines.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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