DAILY MAVERICK WEBINAR
The Aurora gold mining saga: ‘Not a victimless crime’
Journalist and author Dianne Hawker joins Daily Maverick editor-at-large, Richard Poplak, to discuss her decade-long exploration into the criminal activity that took place at a liquidated gold mining company – with very real human consequences.
‘She had an entire life, and it was snatched away in a second by something that, even to this day, she can’t explain,” said Dianne Hawker, journalist and author of the book, “How to Steal a Gold Mine: The Aurora Story”, during a Daily Maverick webinar on Wednesday.
“Her life has been irrevocably changed by all of these events, and the people who have done this have carried on with their lives like nothing has happened.”
Hawker was speaking to Daily Maverick editor-at-large, Richard Poplak, about Susan Ferreira, widow of a mineworker who committed suicide after the company he worked for was liquidated and sold to politically connected business, Aurora Empowerment Systems, that made promises backed by nonexistent funds.
The book starts with Ferriera’s story and documents the fraud and crime that followed after the Pamodzi Gold mines were liquidated and Aurora made a bid to rescue the mines and the workers.
For over a decade, Hawker researched the Aurora story through interviews, union representations and records. To this day, justice has not been served and many former workers are still asking when they will be paid.
In the webinar, Hawker explains that Pamodzi Gold was trying to break into gold mining as a large, black-owned industry player in 2007, and bought a number of small mines.
After facing several challenges, they were unable to pay their creditors and were forced into liquidation.
In 2009, Aurora Empowerment Systems entered the picture with a staggering bid of R650-million, promising to be a new black-owned player that would help workers with empowerment programmes and healthcare and even set up a scheme for workers to own shares in the company.
But over the years it became clear that the money they said they had available to fund the deal didn’t actually exist, explained Hawker, who began piecing the truth together from court records.
A big reason this company had so much buy-in from the outset, despite not actually having the funds, was because of its politically connected directors – Khulubuse Zuma, former president Jacob Zuma’s nephew; his lawyer Michael Hulley, and former president Nelson Mandela’s grandson, Zondwa Mandela.
“I think this is where things went horribly wrong because nobody really looked at it,” Hawker told Poplak.
“They saw these people with political connections and didn’t really go into the details of what that actually meant and whether they could really deliver.
“The very sad reality is that thousands of people’s lives have been negatively affected because of that very poor oversight.”
What is liquidation?
Liquidation is when a company cannot pay its debts and has to sell assets to cover debt costs, or, in extreme instances – such as this – is put into liquidation so the maximum value of assets can be extracted in order to pay creditors.
“When a company is in trouble, one of their creditors can file for liquidation because, for whatever reason, they might not be able to pay,” explained Hawker.
Then the liquidators, who are independent practitioners overseen by the master of the high court, will evaluate the company’s situation to see if it can be salvaged or if it needs to be sold outright or have its assets split up and sold.
“The thing that’s very important is that if you’re a liquidator, you’re put into a position of extreme power. Some businesses have millions of rands worth of assets, even if they don’t have actual money,” said Hawker.
In the case of Pamodzi Gold, they didn’t have enough cash, but they had an estimated R1.7-billion in assets under and above ground.
Pamodzi Gold had R1.7 billion in assets, and controversial liquidator Enver Motala was playing the field. With his own political connections to represent companies facing liquidation, a pay-back system had him pocketing over R50 million in fees alone.https://t.co/FmNTFzjByi pic.twitter.com/7PZTLSEInm
— Daily Maverick (@dailymaverick) March 1, 2023
Enver Motala, the main liquidator in this case, had a fraud conviction from the 1970s which he hid from the master’s office. He used his political connections to represent companies facing liquidation, pocketing over R50-million in fees alone, with a payback system.
“None of the people who were actually involved in this are in jail… there’s been no criminal action against [Motala] at all, even though I believe that evidence is there,” said Hawker.
Poplak describes Hawker’s book as a “story of the elite capture of an important piece of mining infrastructure”.
Aurora Empowerment ended up stripping the mines of their assets, even though they had never paid for the mines (there is still no evidence of the money they initially bid ever having existed).
They stole and sold what was underground, as well as everything above ground; all the machinery and infrastructure needed to mine, as well as scrap metal.
“The above-the-ground assets would actually be more significant because you can’t access that gold without having winders, without having those towers, without having underground piping,” said Hawker.
“So key infrastructure that was meant to keep the mine running was being sold off.”
Hawker explained that while the directors – particularly Zuma and Mandela – repeatedly claimed that the asset stripping was being done by Zama Zamas (illegal miners), it emerged in the high court inquiry that scrap metal companies came into the mine to retrieve metal, which the workers documented.
“The important thing to remember is that Aurora never paid for those mines,” said Hawker.
“So it’s like me saying to you, you can come and stay in my house for the time being, and then you decide to start selling off my things before you’ve paid for staying in my house.”
The human cost
Poplak and Hawker discussed that, to begin with, the mine workers were not well paid – many were from Mozambique and couldn’t afford to go home, or were too embarrassed to face their families with their meagre earnings.
When Aurora took over, most of the workers were not paid and were subjected to appalling labour practices.
“The workers fared extremely badly and that, I think, is really one of the saddest parts of this story,” reflected Hawker.
The group of mines employed around 5,000 workers, of which only 300 received a payout from the Aurora estate.
“For me, that number doesn’t make any sense,” said Hawker, explaining that the directors said it was mainly down to claim issues, with workers being left to their own devices to sort out the complicated liquidation claims.
Hawker said that many years later, workers were required to provide payslips to prove how much they were owed and how much they were paid. Many were unable to locate or complete that documentation in time.
“I really wanted to not just make it a story about court documents, but about the people that were affected by these processes… getting people to understand that this is not a crime that had no victims.” DM
Order your copy of Dianne Hawker’s How to Steal a Gold Mine: The Aurora Story from the Daily Maverick Shop and receive free delivery anywhere in South Africa.
Subscribe to the Daily Maverick webinar newsletter and keep updated with our upcoming conversations.