THE first shareholders’ meeting in eight years by JCI, the former mining company that is now essentially a shell, turned out to be as messy and confusing as the company’s Brett Kebble-related history.
Shareholders arrived at the Balalaika Hotel in Sandton ready to take on bigwigs such as CEO Peter Gray and chairman Peter Thomas for spending millions on salaries, auditors and lawyers at a time when the company was not generating any money.
In 2011, Mr Gray earned R9.4m compared with the R6.6-million annual salary of David Brown, who was then the head of Impala Platinum. At the time, Implats employed about 60,000 people and had a market capitalisation of R115bn, compared with JCI’s R189m market cap.
Total directors’ remuneration from 2006 to 2012 was R79m.
Mr Gray also received bonuses of R38m.
It was revealed at the meeting that JCI recently paid KPMG a R100m fee for its forensic auditing services.
A document seen by Business Times showed that JCI had spent R337m on compensation for directors, lawyers and financial services.
Shareholders demanded that JCI be declared insolvent, but company representatives emphasised that JCI was still solvent and they would have to wait for the correct time to wind up the company.
The company has no real assets except for its 49% stake in the loss-making Boschendal wine estate and an interest in Village Main. JCI has resorted to taking out big loans, secured by its stake in Boschendal, from Investec. Mr Thomas is also a non-executive director of Investec.
JCI, founded in 1889, was acquired from Anglo American by Kebble in the 1990s. After Kebble’s death in 2005, his business scandals came to the surface, leaving the company in a very tight spot.
Financial forensics showed that JCI had about 200 subsidiaries in 15 different jurisdictions, including Siberia and Sierra Leone.
According to Mr Thomas, most of these companies had missing and/or incomplete financial records due to various fraudulent activities. “We inherited a magnitude of difficulties,” he said.
JCI’s biggest battles included a claim of R20bn from Kebble’s other company, RandGold & Exploration, for the money stolen from RandGold by Kebble to pump into JCI, which ended up paying out about R900m.
* This article was first published in Sunday Times: Business Times
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