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·  Arqomanzi is the biggest creditor after acquiring Vantage Goldfields loans from Standard Bank ·  Arqomanzi’s former black empowerment partner, Siyakhula Sonke Empowerment Corporation (SSC), claims that Arqomanzi had been corrupt ·   Arqomanzi has denied imposing arbitrary or non-commercial conditions on potential investors

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Sizwe sama Yende

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The biggest creditor of Mpumalanga’s two gold mines that were put on business rescue a decade ago has been accused of holding the reopening of the mines to ransom by demanding exorbitant amounts from potential investors.

Arqomanzi (Pty) Ltd became the biggest creditor of Lily and Barbrook mines situtated in Louisville outside Barberton owned by Australian company, Vantage Goldfields Limited (VGL), when it acquired loan claims worth R189 million against the proprietor from Standard Bank a few years ago.

This gambit aimed to give Arqomanzi the strongest voice when business plans were to be voted, but Vantage Goldfields was vehement in opposing any deal that would see Arqomanzi’s black empowerment partner, Siyakhula Sonke Empowerment Corporation (SSC), taking over the mines.

SSC has since severed ties with Arqomanzi, and it has levelled the accusations against Arqomanzi’s director, Neil Herrick, in an update to creditors and interested parties dated February 9.

SSC’s head of legal, Dr Godknows Mudimu, said in the update that Arqomanzi bought the claims for R27 million and was now selling them for R168 million to potential investors.

“As you will recall, Arqomanzi purchased the VGL loan claim valued at R391 million for R8,990,510 and the Barbrook loan claim valued at R189 million for R6,492,168. Both these claims were declared as valid unsecured claims and thus hold a creditor voting right,” Mudimu wrote.

“Further, in 2021 Arqomanzi purchased employee claims valued at R37 million for an amount of R10,773,381. The employee claims were purchased at the back of serious promises – that the remainder of their claims would be paid in full and that the mine would be opened, with the former employees being re-employed. It is on this basis that the employees were comfortable with selling some of their claims, especially after Mr Herrick convinced the employees that he had the blessing of the late Chief (Tikhontele Dlamini).”

SSC further alleged that Arqomanzi and its directors purchased a vehicle to influence the late Chief Dlamini to support Arqomanzi in the pursuit to purchase the employee claims and accordingly misled Chief Dlamini.

“Many employees, who were vulnerable at the time sold their claims under the promise that the mines would re-open in less than 12 months and that the remainder of their claims would be settled. In total, Arqomanzi paid less than R27 million for the loan and employee claims that makes it the purported largest creditor and holding the business rescue process to ransom,” Mudimu said.

Herrick has denied the allegations in his response to the creditors and interested parties.

“Arqomanzi has not imposed any arbitrary or non-commercial conditions on potential investors and consistently assesses proposals in light of their ability to deliver a fully funded and implementable rescue. Arqomanzi has been approached by several potential investors and continues to engage with them for the benefit of all stakeholders, including employees and communities,” Herrick said.

He said that assertions that the business rescue process has been taken over by a creditor were unfounded and inconsistent with the statutory framework.

This year on February 5 marked exactly ten years since the ground at the entrance Lily Mine sank. 

The disaster caused a shipping container office to plunge 60 metres below  the surface. Three workers who were in the office - Yvonne Mnisi, Pretty Nkambule, and Solomon Nyirenda -  were not recovered as the container had not been retrieved.

About 1 000 workers lost their jobs. The business rescue process has not yielded any positive results over the years while business rescue practitioner, Rob Devereux, has been accused of being indecisive and stalling the process by entertaining potential investors who had no funds.

The Lily Mine disaster also affected sister company, Barbrook, and it had to be put under business rescue.