St. LOUIS () -- Gold miner DRDGOLD [Nasdaq:DROOY], South African's fourth largest gold producer, announced today that it intends to proceed with its R100 million claim ($14 million) against former Brett Kebble company, JCI, after it claimed the ordeal had been resolved in a circular.
The claim relates to the invalid issue of 8.2 million DRDGOLD shares when the company was under the chairmanship of Roger Kebble, Brett's father, for the Rawas gold mine in Indonesia, acquired from Laverton Gold at a value of R122.6 million ($17 million) in 1999.
"We can demonstrate that the conditions for a settlement agreement were never met and, as a result, no settlement was reached," Mark Wellesley-Wood, DRDGOLD's CEO said in a statement.
However, consolidated African Mines Limited (subsequently named JCI Limited) owned 19.5% of Laverton Gold and Laverton also owed money to the company. In DRDGOLD's press release today, the company said that subsequent investigations show that:
- The Rawas mine had no value at the time of share issue;
- Laverton was "insolvent and indebted" to JCI and other companies;
- 8.2 million DRDGOLD shares were allotted invalidly and issued to Laverton's creditors which included JCI.
Claim Unsettled?
In April, a South African Scorpion unit said it was investigating JCI and another firm held by Kebble for suspected fraud estimated at R1 billion ( $139 million) of missing money.
In a JCI circular from September 14, JCI said that the claim was settled in August 2005 but that DRDGOLD alleges the settlement was not fully concluded.
A year ago, Investec developed a special purpose loan facility to keep the troubled JCI in existence, however DRDGOLD continues to say that the terms for the settlement have not yet been met.
"Brett Kebble approached me in April 2005, when he must have been under enormous personal pressure and JCI was facing insolvency and the prospect of an all-in settlement therefore made obvious sense," said Wellesley-Wood.
"However it was clearly stated and accepted that any agreement would have to be concluded formally and that Brett Kebble/JCI would have to pay money under the deal, and meet other conditions before DRDGOLD would sign."
A JCI spokesman, Brian Gibson, was quoted as saying "We consider the matter to have been settled, but they clearly disagree, so it will be for the courts to decide."
DRD's decision to pursue the claim adds to the long list of JCI's legal battles, likely to continue on for quite some time. Randgold & Exploration yesterday that it would be more than quadrupling its claim to JCI, mostly due in part to frauds associated with Kebble, from $158 million to $697 million.
DRDGOLD shares were trading up 1.65% or 2 cents at $1.23 on the Nasdaq during mid afternoon trade.
