Monday, December 11, 2023

Former BCL directors rebuff probe under oath

Former directors of the Bamangwato Concessions Limited (BCL) have rebuffed an attempt by liquidator Nigel Dixon-Warren to investigate them under oath over their role in the collapse of the mine. 

This emerges from the latest status report sent to the creditors of the BCL and Tati by Dixon-Warren who has since announced his decision to quit as a liquidator.

“Creditors will recall that the second meeting was adjourned to enable the Presiding Officer to consider her ruling in relation to the objections by the former directors of BCL to being questioned under oath at the meeting of creditors,” reads the report.

Dixon-Warren further revealed that government’s attorneys sought to pass a resolution to restrain him as the liquidator from conducting further investigations into the reasons for the collapse of BCL and the directors’ role in such collapse. He said the Presiding Officers ruling must be given at the reconvened meeting of creditors.

“My investigations into the failure of the BCL including the conduct of management, directors and others is on-going. This includes the Polaris II strategy and the formation of the Nkomati and Tati share sale purchase agreements,” said Dixon-Warren.

He added: “I remain of the view that it is critical that the directors together with key stakeholders, including the auditors and bankers, be questioned at the reconvened second and subsequent meetings of creditors.”

Dixon-Warren further noted that “The investigations are on-going and an assessment is being made as to what recoveries can be made and/or which contracts may be set aside. A detailed brief of the matters being investigated will be provided to the replacement liquidator.”

On a related matter, Dixon-Warren stated that investigations into the commercial basis of the Nkomati deal continue. In 2014, BCL agreed to buy 50 percent of the Nkomati nickel mine and 85 percent of Tati Nickel Mining Company located in Botswana, from Norilsk Nickel, which is among the world’s biggest producers of the metal, for $337 million. BCL was supposed to raise $250 million in a bond sale to help fund the purchases but could not as it was allegedly insolvent.

According to Dixon-Warren, “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.”

He said he also informed  the Master of the High Court (Michael Motlhabi) that the first meeting of creditors of Tati also needs to be convened as it has been more than three months since it was finally wound up, progress needs to be made to wind up that estate and a final liquidator be appointed.

“The first meeting of creditors of BCLI is long outstanding. As reported previously, I brought an application in terms of section 468 of the Companies Act for the liquidations of BCL and BCLI to proceed as if they were one company. This application was dismissed by the High Court. I lodged an appeal. It is expected that the appeal will proceed before the Court of Appeal in July 2019,” he said.

If the appeal is unsuccessful, Dixon-Warren said, he has recommended to the Master that the first meeting of creditors of BCLI should be called without delay.

He revealed that the Master and the Government have made it clear that the Government will not provide any further funding to BCL unless “and until I resign as Liquidator and Provisional Liquidator respectively of BCL, Tati and BCLI.”

“Should I not resign, BCL will run out of funds and the mine will be flooded with associated environmental consequences, employee contracts and contracts with third party suppliers will have to be terminated; all to the ultimate prejudice of the general body of creditors,” he said.

Dixon-Warren also accused Motlhabi of having abdicated and misunderstood his responsibilities in terms of the Companies Act.

Citing a complaint lodged by the government against his conduct (it is not clear what kind of misconduct  the government accused the liquidator of) which was upheld by Motlhabi, Dixon-Warren said Motlhabi himself should conducted an independent inquiry (into the liquidator’s alleged misconduct) as he was obligated to do so.

“I have, as a result, issued a statutory notice in terms of the applicable law to take his decision on review. The Master will have the opportunity to defend his position in the appropriate forum in due course,” said Dixon-Warren.

He also accused Motlhabi of interfering in the decision to surrender the BCL mining licence.

“He has advised that he has not agreed to the envisaged surrender of the BCL licence. The decision to surrender the licence is a commercial decision and without funding is in the best interests of the creditors given the financial position of the estate,” said Dixon-Warren.

He said it is not within the purview of the Master’s oversight of a liquidator and has no basis in the Companies Act.

He said it was the Master who requested to him to resign.

“The request to resign is an unlawful interference in the independence of the liquidator and contrary to the provisions of the Companies Act. Indeed in terms of the Companies Act the Master does not have the authority to do so (the Master may only apply to Court for the removal of a liquidator in limited circumstances),” said Dixon-Warren.


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