Tweet
The Sunday Independent (South Africa)
June 29, 2014
Tycoon faces auction of assets after mining deal goes sour
by LOYISO SIDIMBA
RECLUSIVE mogul Mzi Khumalo faces yet another attempt to auction his
prized local assets following the South Gauteng High Court's dismissal
of his bid to appeal a judgment ordering him to pay his Lebanese
partner, Pierre Fattouch, more than R53 million.
Last month, Judge Sherise Weiner ordered Khumalo to pay Fattouch for a
botched sale of shares and a mining deal in Armenia.
Khumalo's debt may top R77m, as he was also ordered to pay 9 percent
annual interest from April 2009 until the date of the final payment,
as well as pay Fattouch's legal costs, according to the judgment.
Last Thursday, Weiner dismissed Khumalo's application for leave to
appeal with costs, according to |Fattouch's South African lawyer,
Pumzo Mbana.
Mbana said Khumalo had no reasonable prospects of success on appeal as
no other court could come to a conclusion different from that in Judge
Weiner's ruling last month.
"We have prepared a writ of execution in the interim, claiming the
judgment debt.
"The sheriff will be executing the writ in due course," said Mbana.
Khumalo's latest money woes follow another close shave with one of his
creditors, RMB Private Bank, which he and his Mzi Khumalo Family Trust
owe for bond repayments.
In April, the scheduled auction of his mansion in Zimbali in
KwaZulu-Natal, which has nine reception areas, seven bedrooms, five
bathrooms and five garages, was halted after he made arrangements to
settle his debt.
Khumalo has made part of the payments, which stood at about R17m when
the matter was finalised in the South Gauteng High Court in July 2012.
RMB Private Bank previously told The Sunday Independent that Khumalo
still owed millions |but declined to reveal the exact amount, saying
"it's a privileged amount".
In his application for leave to appeal the high court's judgment in
Fattouch's claim, Khumalo said Judge Weiner erred both in fact and in
law by failing to take into account sufficiently that the matter dealt
with a transaction or act relating to the purchase of a mine.
Khumalo added that Judge Weiner incorrectly interpreted the Protection
of Businesses Act by failing to differentiate between the purchase and
sale of a mine, which is a transaction and/or act relating to the
purchase and sale of raw materials and is connected with mining,
production, importation, exportation, refinement, possession, use or
sale of or ownership in matter or material.
The ex-Umkhonto weSizwe operative argued that the Protection of
Businesses Act was not applicable to an arbitral award arising from a
dispute regarding the sale of shares, notwithstanding that such shares
are in a mining company.
Khumalo accused Weiner of misinterpreting the Protection of Businesses Act.
He said Weiner should not have heard Fattouch's application as he
failed to apply to Finance Minister Nhlanhla Nene for permission to
enforce foreign arbitration awards as required by the Protection of
Businesses Act.
Last month, The Sunday Independent reported that Fattouch approached
South African courts in 2012 after Khumalo failed to pay.
The controversial businessman had between April and September 2009 to
pay Fattouch.
Khumalo's debt followed a written sale of shares agreement with
Fattouch in May 2006 through his (Khumalo's) Rosario International
Investments.
He had also reached an oral agreement for Fattouch not to proceed with
litigation until he (Fattouch) had obtained two lucrative mining
licences in Armenia.
Fattouch won during arbitration in France and applied to the South
Gauteng High Court to have the award made an order of the court.
According to court papers, Fattouch and Khumalo agreed in March 2009
for Khumalo to pay $5m in four instalments of $1.25m for the licences.
Khumalo's Metallon Gold, now Zimbabwe's largest gold miner, is
responsible for about 50 percent of that country's total production of
the precious metal and has "greater potential", according to the
European Gold Centre.
In its listing statement at the Stock Exchange of Mauritius in March,
Botswana-owned Shumba Coal revealed that it had invested $50m (about
R526m) in one of Metallon Gold's mines in Zimbabwe.
Metallon Gold has five mines in Zimbabwe - Redwing, How, Shamva,
Mozowe and Acturas.
June 29, 2014
Tycoon faces auction of assets after mining deal goes sour
by LOYISO SIDIMBA
RECLUSIVE mogul Mzi Khumalo faces yet another attempt to auction his
prized local assets following the South Gauteng High Court's dismissal
of his bid to appeal a judgment ordering him to pay his Lebanese
partner, Pierre Fattouch, more than R53 million.
Last month, Judge Sherise Weiner ordered Khumalo to pay Fattouch for a
botched sale of shares and a mining deal in Armenia.
Khumalo's debt may top R77m, as he was also ordered to pay 9 percent
annual interest from April 2009 until the date of the final payment,
as well as pay Fattouch's legal costs, according to the judgment.
Last Thursday, Weiner dismissed Khumalo's application for leave to
appeal with costs, according to |Fattouch's South African lawyer,
Pumzo Mbana.
Mbana said Khumalo had no reasonable prospects of success on appeal as
no other court could come to a conclusion different from that in Judge
Weiner's ruling last month.
"We have prepared a writ of execution in the interim, claiming the
judgment debt.
"The sheriff will be executing the writ in due course," said Mbana.
Khumalo's latest money woes follow another close shave with one of his
creditors, RMB Private Bank, which he and his Mzi Khumalo Family Trust
owe for bond repayments.
In April, the scheduled auction of his mansion in Zimbali in
KwaZulu-Natal, which has nine reception areas, seven bedrooms, five
bathrooms and five garages, was halted after he made arrangements to
settle his debt.
Khumalo has made part of the payments, which stood at about R17m when
the matter was finalised in the South Gauteng High Court in July 2012.
RMB Private Bank previously told The Sunday Independent that Khumalo
still owed millions |but declined to reveal the exact amount, saying
"it's a privileged amount".
In his application for leave to appeal the high court's judgment in
Fattouch's claim, Khumalo said Judge Weiner erred both in fact and in
law by failing to take into account sufficiently that the matter dealt
with a transaction or act relating to the purchase of a mine.
Khumalo added that Judge Weiner incorrectly interpreted the Protection
of Businesses Act by failing to differentiate between the purchase and
sale of a mine, which is a transaction and/or act relating to the
purchase and sale of raw materials and is connected with mining,
production, importation, exportation, refinement, possession, use or
sale of or ownership in matter or material.
The ex-Umkhonto weSizwe operative argued that the Protection of
Businesses Act was not applicable to an arbitral award arising from a
dispute regarding the sale of shares, notwithstanding that such shares
are in a mining company.
Khumalo accused Weiner of misinterpreting the Protection of Businesses Act.
He said Weiner should not have heard Fattouch's application as he
failed to apply to Finance Minister Nhlanhla Nene for permission to
enforce foreign arbitration awards as required by the Protection of
Businesses Act.
Last month, The Sunday Independent reported that Fattouch approached
South African courts in 2012 after Khumalo failed to pay.
The controversial businessman had between April and September 2009 to
pay Fattouch.
Khumalo's debt followed a written sale of shares agreement with
Fattouch in May 2006 through his (Khumalo's) Rosario International
Investments.
He had also reached an oral agreement for Fattouch not to proceed with
litigation until he (Fattouch) had obtained two lucrative mining
licences in Armenia.
Fattouch won during arbitration in France and applied to the South
Gauteng High Court to have the award made an order of the court.
According to court papers, Fattouch and Khumalo agreed in March 2009
for Khumalo to pay $5m in four instalments of $1.25m for the licences.
Khumalo's Metallon Gold, now Zimbabwe's largest gold miner, is
responsible for about 50 percent of that country's total production of
the precious metal and has "greater potential", according to the
European Gold Centre.
In its listing statement at the Stock Exchange of Mauritius in March,
Botswana-owned Shumba Coal revealed that it had invested $50m (about
R526m) in one of Metallon Gold's mines in Zimbabwe.
Metallon Gold has five mines in Zimbabwe - Redwing, How, Shamva,
Mozowe and Acturas.