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PORTIA NKANI reflects on Warren’s latest findings and achievements before departure.
BROKER’S FEES (POST-LIQUIDATION)
The Liquidator is of the view that the brokers of both BCL and Tati did not act in the interest of the insured and as a result the estates have been significantly over-charged for the premiums for the years 2017-2018 and 2018-2019. The Liquidator has written a demand for a refund of premiums and refund of penalties applied following the cancellation of policies in October 2018. The amount to be refunded is in excess of P20 million. The response from the brokers is awaited.
AMOUNTS INCORRECTLY PAID TO PRE-LIQUIDATION BANK ACCOUNT
Barclays Bank has also been receiving funds in to the pre-liquidation account in the post-liquidation period amounting to P1, 4 million to date. This is despite a number of written requests to Barclays to freeze the accounts (including on the date of liquidation). Two written requests have been made to Barclays to transfer the funds. There has been no response. I have briefed the estate’s attorneys on the matter.
STAFF LOAN ADMINISTRATION FEES
BCL had agreements with various banks including Barclays Bank, BancABC, Botswana Building Society, Standard Chartered Bank and First National Bank for administration of loan agreements to BCL staff. Some of the banks owe BCL for administration fees both pre and post liquidation. Action is being taken to recover these monies. The quantum of these claims is in excess of P2 million.
Investigations into the commercial basis of the Nkomati SPA and the Tati SPA continue. As has been previously reported Norilsk had directors on the Board of BCL until a few days before the binding offer for Nkomati and Tati was submitted.
In South Africa, the review of the South African Director-General’s decision to grant consent to the transaction envisaged in the Nkomati SPA is pending before the High Court in Pretoria. This matter has been informally stayed pending the outcome of a statutory appeal of the Director-General’s decision which statutory appeal is presently being considered by the relevant regulatory authority. The South African State Attorney advised last year that the Minister would make a decision in respect of the appeal in December 2018. However, the decision has still not been issued. The estates’ South African attorneys are again following up with the State Attorney.
The Liquidator has commenced recovery proceedings against RioZim in Zimbabwe for $35 million owed to BCL. This is before the High Court in Zimbabwe. It is understood that that RioZim has engaged in various interlocutory applications which has delayed its obligation to file a plea to BCL’s claim.
The replacement liquidator will need to apply to the High Court of Zimbabwe to be recognised as a foreign liquidator in order to continue with this litigation. Thereafter, the replacement liquidator will need to file security with the Zimbabwean Master in order to be allowed to proceed with the litigation.
Transport Holdings alleged it was a secured creditor in the BCL estate on the basis of a tacit agreement of pledge and is holding certain stock items (matte and supplies) as security. It did submit a claim for approximately P13 million against BCL but withdrew the claim prior to it being proven as the security was not considered valid and it was unwilling to submit a concurrent claim in the estate.
The Liquidator agreed to arbitration with Transport Holdings to determine whether Transport Holdings is a secured creditor. The arbitration was heard in April 2019. The arbitrator determined Transport Holdings was not a secured creditor. Transport Holdings was ordered to pay the costs of the arbitration. Transport Holdings has through its attorney now raised a procedural objection to the award and may be considering launching an application to review the decision of the arbitrator. Whilst Dixon-Warren says he has been advised that the objection is without merit, this he said may delay the finalisation of the dispute.
The quantum of the Transport Holdings’ claim is also subject to dispute. Transport Holdings have submitted schedules in support of its claim however these are disputed. Further analysis would need to be done if and when Transport Holdings submit a concurrent claim in the estate, according to Dixon-Warren.
Negotiations are underway to release the stock held in accordance with the terms of the arbitration agreement.
Litigation has commenced against PPC for its failure to adequately rehabilitate the waste rock dump over which it was granted a lease by BCL. This litigation is on-going. Dixon-Warren in his report states that, the quantum of this claim has yet to be finally determined but will amount to several million Pula.
SIWI INVESTMENTS / TLOU CRUSHERS
Legal action has commenced against Siwi Investments / Tlou Crushers for failure to pay rental pre and post liquidation for the lease of a waste rock dump and for its failure to undertake ongoing rehabilitation. The quantum of this claim is also several million Pula.
Regarding this matter, Dixon-Warren indicated that he is in the process of commencing legal action against Air Liquide for its failure to deliver equipment pre-liquidation to a subsidiary of Tati and as a consequence of this failure substantial storage costs have been incurred by the BCL Group. “The goods are stored in Belgium, South Korea and France. The potential quantum of the claim is in excess of P20 million,” reads the report.