Lerala dispute heads for out of court settlement
Mbongeni Mguni | Friday February 2, 2018 15:37
While both sides have filed papers in Belgium in the case in which the government is suing to recover the stones, Mineral Resources, Green Technology and Energy Security minister, Sadique Kebonang this week said focus was now on pursuing an out of court settlement hopefully by March.
“The nature of liquidation is that it can take forever and so if we can negotiate that, the better for all parties,” Kebonang told BusinessWeek.
“Government lawyers and the other party are therefore in discussions to have the matter resolved much quicker.
“The delay of course comes because we are talking to people abroad and as such discussions do not move as fast.” Kimberley Diamonds’ principal shareholder has already offered to pay government US$100,000 for unpaid royalties and US$250,000 for workers’ packages in return for withdrawing the court case over the 53,000 carats.
Lerala Mine closed on May 29 last year, citing weak sales and rendering at least 130 workers unemployed. Kebonang however said the ongoing negotiations would not be based solely on the offer already made.
“We are not just looking at that proposal, this is a broad-based discussion and it is one that must be settled to the satisfaction of government, workers, creditors, the liquidator and others. “Everything is on the table in these discussions; our talks are not just based on that proposal,” he said.
The discussions come in the wake of allegations that just before Lerala’s closure last year, Kimberley executives spirited the parcel of diamonds out of the country, selling the stones grossly below value, to keep them out of creditors reach.
This week, liquidators in Sydney, Australia told BusinessWeek there was no consideration of an out of court settlement and their case against Kimberley Diamonds was proceeding in Western Australia courts.
Creditors there are suing Kimberley Diamonds for P172 million over the alleged spiriting away of a parcel of diamonds there, shortly after the closure of the company’s Ellendale Diamond mine in that country. Ellendale closed in June 2015.
According to documents supplied by the Sydney liquidators, the matter should be heard in court by the middle of this year. “Those recovery proceedings have progressed to the evidentiary stage and the liquidators have served their evidence in chief,” reads a report provided by the liquidators.
“Due to the various delays by Kimberley Diamonds the directors in filing their evidence, the matter had originally been set down for hearing in November 2017 with an estimated hearing time of four days.
“Once the defendants served their evidence it became apparent the hearing would take much longer and ten days is the current estimate. “In those circumstances the hearing dates allocated were vacated and we hope that a hearing of the claim should be able to take place by the middle of next year.” Kathryn Gesilva, the manager of Jirsch Sutherland who are the liquidators in Sydney, told BusinessWeek that some recoveries had already been made in respect of workers’ dues from Ellendale.
“I advise that the winding up of the company is ongoing. To date, we have distributed a dividend of 100 cents in the dollar in respect to employees’ outstanding wages and superannuation claims. We have also distributed a dividend of 29.22 cents in the dollar for employees’ leave entitlement claims,” she said.
Meanwhile, the 130 local workers rendered jobless at Lerala continue to await the outcome of the out of court negotiations.