Sutha Civils lays fraud charge against Wescoal, threatens to launch liquidation process.
Mar15,2011 07:16:15 AM
By Allan Seccombe, Business Day
IN THE matter of Wescoal versus its contractor, Sutha Civils, both parties are at opposite poles, with Sutha laying a complaint with the police against the JSE-listed coal producer’s subsidiary, Wescoal Mining, which denies any wrongdoing and blames the action on "malicious intent".
Sutha will today file a liquidation process in the South Gauteng High Court, said Sutha CEO Nico Swart, who says he will meet members of the Commercial Crimes Unit to flesh out his allegations and give documentary proof. Mr Swart is clear about the root of his allegation made against Wescoal and its Khanyisa colliery. "There is no coal," he said yesterday .
He said Sutha was contracted to do open-cast mining at Khanyisa and were given co-ordinates by the mine’s geologist. However, when the site was opened, the targeted coal was not there, he said.
"This is not my problem if there is no coal," he said. "The tonnages mined from the box cuts are not what they told investors.
"I have my documents, contracts and drawings showing where places were opened up, but there was no coal. I can show these to investors, the police. I can show the coal is not there."
Wescoal Holdings CEO Andre Boje dismissed the claim with unusual bluntness. "I categorically deny that claim. Furthermore, I’m not going to debate with these hooligans in the media. They are making unfounded and scary allegations."
Wescoal and its lawyers had yet to see the documentary proof Mr Swart claimed to have, Mr Boje said. "Among a number of unsubstantiated claims, Sutha has now accused Wescoal of overstating tonnages mined at Khanyisa. We categorically deny this. We are a company with integrity and ethical principles and in this case, a target of malicious intent."
Wescoal’s counterallegation is that Sutha was mining outside the area in some cases.
Wescoal shares fell to 91c yesterday before staging a recovery to end back at Friday’s price of 99c.
Wescoal told the market via a release on Sens that it had begun its first investigation into irregularities in the Sutha contract within five months of Sutha being hired to mine the west pit at Khanyisa.
"No meaningful explanations were forthcoming from Sutha and the situation was exacerbated, until December 2010 when Wescoal removed Sutha from the Khanysia property and operation in entirety," the Sens statement said.
Mr Swart said there may be a second party to the liquidation proceedings. Mr Boje said he was aware of no other claims against Wescoal.
Khanyisa is the first operating mine in the group and marked its shift from being a coal trading firm to an integrated producer. It is an open-cast mine near Kendal in Mp umalanga and has an estimated reserve of 2,7-million tons.
In April to September last year , Khanyisa produced 887000 tons of coal, of which 546000 tons was supplied to Eskom. Wescoal said that the mine should reach its stated target of 1,2-million tons of run-of-mine coal by the financial year-end on March 31, and it is forecast to have supplied Eskom with 900000 tons in the same period.
By Allan Seccombe, Business Day
IN THE matter of Wescoal versus its contractor, Sutha Civils, both parties are at opposite poles, with Sutha laying a complaint with the police against the JSE-listed coal producer’s subsidiary, Wescoal Mining, which denies any wrongdoing and blames the action on "malicious intent".
Sutha will today file a liquidation process in the South Gauteng High Court, said Sutha CEO Nico Swart, who says he will meet members of the Commercial Crimes Unit to flesh out his allegations and give documentary proof. Mr Swart is clear about the root of his allegation made against Wescoal and its Khanyisa colliery. "There is no coal," he said yesterday .
He said Sutha was contracted to do open-cast mining at Khanyisa and were given co-ordinates by the mine’s geologist. However, when the site was opened, the targeted coal was not there, he said.
"This is not my problem if there is no coal," he said. "The tonnages mined from the box cuts are not what they told investors.
"I have my documents, contracts and drawings showing where places were opened up, but there was no coal. I can show these to investors, the police. I can show the coal is not there."
Wescoal Holdings CEO Andre Boje dismissed the claim with unusual bluntness. "I categorically deny that claim. Furthermore, I’m not going to debate with these hooligans in the media. They are making unfounded and scary allegations."
Wescoal and its lawyers had yet to see the documentary proof Mr Swart claimed to have, Mr Boje said. "Among a number of unsubstantiated claims, Sutha has now accused Wescoal of overstating tonnages mined at Khanyisa. We categorically deny this. We are a company with integrity and ethical principles and in this case, a target of malicious intent."
Wescoal’s counterallegation is that Sutha was mining outside the area in some cases.
Wescoal shares fell to 91c yesterday before staging a recovery to end back at Friday’s price of 99c.
Wescoal told the market via a release on Sens that it had begun its first investigation into irregularities in the Sutha contract within five months of Sutha being hired to mine the west pit at Khanyisa.
"No meaningful explanations were forthcoming from Sutha and the situation was exacerbated, until December 2010 when Wescoal removed Sutha from the Khanysia property and operation in entirety," the Sens statement said.
Mr Swart said there may be a second party to the liquidation proceedings. Mr Boje said he was aware of no other claims against Wescoal.
Khanyisa is the first operating mine in the group and marked its shift from being a coal trading firm to an integrated producer. It is an open-cast mine near Kendal in Mp umalanga and has an estimated reserve of 2,7-million tons.
In April to September last year , Khanyisa produced 887000 tons of coal, of which 546000 tons was supplied to Eskom. Wescoal said that the mine should reach its stated target of 1,2-million tons of run-of-mine coal by the financial year-end on March 31, and it is forecast to have supplied Eskom with 900000 tons in the same period.
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