Pretoria - The mining rights’ dispute between Russia’s Transasia Minerals and Umsobomvu Coal, owned by local businessman Hector Kunene, is due to make a turn before the Legal Practice Council (LPC).
This, after former Mpumalanga premier, Transasia’s shareholder and chairperson, Mathews Phosa, lodged a complaint against major law firm Edward Nathan Sonnenberg Africa (ENSAfrica) and a now former Johannesburg state attorney for alleged misconduct.
Phosa wrote a letter to the LPC last year, in which he accused the law firm and then state attorney Aubrey Milford, of acting unethically during an application in 2019 before the high court in Pietermaritzburg during one of the many legal battles regarding the mining rights issue.
He requested the LPC to investigate the conduct of both ENSAfrica and Milford in that application. He claimed that they had colluded in producing a “false” notice to abide on behalf of, among others, Police Minister Bheki Cele and Mineral Resources Minister Gwede Mantashe regarding an application launched by Umsobomvu Coal at the time.
“Should ENSAfrica and the state attorney not have intentionally created the fraudulent notice to abide, which was presented to court by ENSAfrica under false representations, the judgment would have not been granted and the outcome of the matter would have been wholly different,” Phosa said in his letter to the LPC.
He stated that this move was prejudicial to him and his partners, (which includes an international investor) and that they have lost millions of rand in damages as “a direct result of the fraud, corruption and collusion committed by ENSAfrica”.
In the 2019 application, which was at the time granted by the court as it was under the impression that the respondents had abided, Umsobomvu Coal asked for an urgent order granting it unlimited access to the mine in KwaZulu Natal.
Both Cele and Mantashe were cited as respondents in that case and as government officials, they had to be represented by the office of the State Attorney.
Phosa said in his letter to the LPC that none of the eight respondents in that case (which included the ministers) had been properly served. “This is because the intention of ENSAfrica from the onset was to defraud and obtain judgment against all of the respondents and to disallow them the opportunity to be represented in the proceedings,” he said.
According to Phosa, the applicant also wanted to mislead the court into issuing a judgment while being under the impression that the matter was not being defended.
“Until today no return of services have been provided, found or exist in the court file showing response on the state respondents,” Phosa said in his letter.
He complained that the application was served on Milford (who was based in Johannesburg at the time) and whom Phosa said was not allowed service of the document on behalf of the two ministers.
“What Milford, as a legal practitioner, should have done in the circumstances, was return to ENSAfrica the document and advise them that he was not able to accept service on behalf of the two ministers. Alternatively, he could have supplied the documents to the relevant legal services of the two ministers offices.”
According to Phosa, ENSAfrica intentionally did not want the respondents to know about the proceedings, so that they could secure their court order. The former ANC treasurer general said the firm thus “fraudulently presented the notice to abide by the application on behalf of the State Attorney’s office”.
“Should ENSAfrica and the state attorney (Milford) not have intentionally created the fraudulent notice to abide, the judgment would not have been granted and the outcome of the matter would have been different,” Phosa stated.
George van Niekerk, of ENSAfrica, told Pretoria News that the complaint by Phosa was baseless. He explained that Umsobomvu sought, on an urgent basis, unconditional access to the mine site for the purposes of complying with its legislative and other obligations and exercising certain of its statutory rights as the holder of the relevant mining rights.
“Considering that the relevant parties were properly represented at the hearing, there is no basis to suggest any fraud. The parties actually delivered answering affidavits and were properly represented at the hearing of the application.
“No evidence has been proffered by Dr Phosa or anybody else for the alleged fraud. In the face of a complete lack of evidence, the allegations simply cannot and should not be entertained,” Van Niekerk said.
Meanwhile Milford, in his answer to the LPC, also denied any wrongdoing or that he had “colluded” with ENSAfrica in the matter. He said he had clear instructions from the ministers to abide by the application.
“As attorneys we do not decide what happens in a matter, but we act on the instruction of a client and as evident from the file note we ensured that we had clear instructions before we decided to abide by the court’s decision.”
Milford, who had resigned from the State Attorney’s office in October 2020, added that they were in any event advised by their instructing advocate at the time to abide by the court’s decision.
The first step in the complaint lodged by Phosa – an investigation by the LPC as to whether there are merit to his complaint to warrant taking the matter further – was due to take place on Monday. This has, however, been postponed indefinitely in light of the fire which had damaged the premises of the LPC earlier this month.
Independent Media’s investigations unit earlier revealed how Transasia had allegedly been defrauded to the tune of R458m by Kunene, the former owner of two mining sites in KwaZulu-Natal, who after having been paid for the rights, failed to transfer it in the name of Transasia, as per a Sale of Prospecting Rights Agreement between the two parties in 2012.
Litigation in this regard across the country, including before the Supreme Court of Appeal (SCA), is still ongoing.
Pretoria News