The tangled web of legal proceedings that has delayed the reopening of the Barbrook and Lily gold mines in Mpumalanga appears to have frustrated the judges of the Supreme Court of Appeal (SCA), who urged all parties involved to move with urgency in finalising the business rescue process.
“The matter cries out for finality to be reached. It is devoutly to be hoped that all the parties involved allow this urgency to inform their conduct and that they will cooperate to the maximum extent possible so as to bring finality to the business rescue proceedings one way or another,” reads a December ruling.
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Dispute details
At issue in this case – the latest in a litany of legal disputes between the business rescue practitioners (BRPs) and the two parties vying for control of the mines – is whether the BRPs were entitled to unilaterally amend the previously adopted business rescue plans.
The BRPs introduced at least three amendments dealing mostly with the change of the dates for the payments of creditors and the reopening of the two mines.
Another amendment dealt with a change in the funding entities – something the SCA deemed “no small matter” after a South African entity called Flaming Silver dropped out and Australia’s Macquarie Metals entered the picture.
SCA ruling
The SCA ruled that the BRPs many not unilaterally amend the business rescue plan, nor does the Companies Act allow for this.
This confirms an earlier ruling by Judge President Francis Legodi of the Mpumalanga High Court in Nelspruit that Hong Kong-backed Arqomanzi, which had acquired from Standard Bank loan claims of R391 million and R189 million in two of the companies that control Barbrook and Lily, was a valid creditor – something the BRPs refuted.
That ruling was appealed to the SCA by Vantage Goldfields SA (VGSA), Vantage Goldfields Limited (VGL) and Lombard Insurance Company.
The respondent in the matter was Arqomanzi. VGL owns 100% of Barbrook and VGSA and VGL own a combined 100% in the Lily holding company, Mimco, though the group is ultimately owned by Australia’s Macquarie Metals, which is not cited in the SCA case.
Costs were ordered against Vantage and Lombard. Arqomanzi and Vantage are battling it out for control of the two gold mines, with Arqomanzi inserting itself into the fray through the acquisition of Standard Bank’s claims against Vantage – which the courts have deemed lawful.
This made Arqomanzi the largest creditor in Vantage. The latest SCA ruling confirms that Arqomanzi is a valid creditor of one of the Vantage companies.
In terms of the Companies Act, this gives it the right to vote on the business rescue plan – though this is also under appeal by Vantage.
Second case to be heard
A second SCA case to be heard in 2023 seeks to challenge Arqomanzi’s claim to be a valid creditor of another company under rescue and whether its claims should be “subordinated” or given full voting rights.
Whichever way this goes, it now appears the litigation is soon to come to the finality the SCA judges urge and the reopening of the two mines is tantalisingly close.
ALSO READ: Inquest into Lily Mine tragedy continues today
This article first appeared on Moneyweb and was republished with permission. Read the original article here.
