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Business Times reports that directors of coal producer Arnot OpCo want the Johannesburg High Court to dismiss a business rescue application by its joint venture partner Salungano (formerly Wescoal), which last month approached the court to have the coal mine in Mpumalanga placed in business rescue.
Salungano cited a liquidity crunch and corporate governance concerns, including the mismanagement of funds. But, according to the directors, the company has secured R250m in funding to keep afloat and pay its creditors. In responding papers, Arnot OpCo director Paul Kasongo disputed that the mine was in financial distress. He accused Salungano of “unilaterally” refusing to comply with its obligations to fund Arnot OpCo in terms of the memorandum of incorporation.” The joint venture was on paper supposed to be a model for worker-controlled mine ownership. It was formed in 2015 after Exxaro Resources exited the mine, leaving workers facing retrenchment. Eight former employees opted to revive the mine, forming a company called Innovators Resources, which entered into the Arnot joint venture with Salungano. Salungano took a 50% stake, Innovators Resources took a 25% stake and some 1,000 retrenched staff held the remaining 25%. But the parties were soon at each other’s throats, with Salungano accusing Arnot OpCo CEO Bontle Aphane – a former Exxaro project engineer – and other directors of flouting corporate governance principles and running the mine into the ground. A preliminary report by Sizwe Ntsaluba Gobodo found that the executives had mismanaged company funds. It uncovered irregular appointments, questionable salary increases, abuse of the shift allowance system and misuse of rehabilitation funds. On Friday, the court reserved judgment in the application for business rescue.
- Read the full original of the report in the above regard by Dineo Faku at BusinessLive (subscriber access only)
- Read too, Arnot Opco mine fights Wescoal, on page 16 of Sunday World of 4 September 2022
Get other news reports at the SA Labour News home page