The legal battle started in 2011 but the actual incident dates back to 2005. The story is complicated and involves Investec, which owned non-performing loan exposure to JCI and Western Areas, which along with Randgold and Exploration were under Brett Kebble’s control. A group of minority Randgold shareholders have now been granted permission by the North Gauteng High court to proceed with a R1.3 billion claim against Investec. The minority shareholders allege that when Investec took control of Randgold’s board, following Kebble’s departure, they used this control to prevent Randgold from pursuing claims against JCI, Western Areas, Investec Bank UK and Investec itself, arising from the theft of Randgold’s portfolio of listed shares. It’s been a long battle and the minority shareholder pockets may be deeper than those at Investec believe. The below statement from the minority shareholders makes for an interesting read, plus there’s a list of beneficial and institutional RNG shareholders below the story. – Stuart Lowman
Randgold shareholders media releaseÂ
The way has been cleared – by a landmark ruling of the North Gauteng High Court on 17 September 2015 – for a group of Randgold & Exploration Company Limited (Randgold) minority shareholders to proceed with a claim in open court against Investec Bank Limited (Investec) for at least R1.3 billion.
The shareholders say they have successfully tested a contention by Investec that shareholders, in the form of registered nominees, do not have locus standi (the right in law) to resort to the courts in instances of dispute.
The seven minority Randgold shareholders have been engaged in legal wrangling with Investec since March 2011 when they applied for an order to have the bank purchase their shares in Randgold for R288.56 per share, plus the ruling Randgold share price at the time of purchase.
The minority shareholders allege that Investec took control of the Randgold board in August 2005, at the time of Brett Kebble’s ignominious departure, and that Investec then used this control to prevent Randgold from pursuing large claims against JCI, Western Areas, Investec Bank UK (IBUK) and Investec itself, arising from the theft of Randgold’s portfolio of listed shares. This, the minority shareholders claim, was highly prejudicial to them and to other Randgold minorities.
Read also: Did Investec help Brett Kebble steal billions from Randgold?
A further 40 Randgold shareholders applied to join the application and, as a result, 4 713 531 Randgold shares – 6.6% of Randgold’s issued shares – were included in the application.
Investec contended that none of the applicants had locus standi to bring the application, but the North Gauteng High Court found, on 17 September 2015, that members, in the form of registered nominees holding 4 510 933 shares – 95.7% of the shares in the application, had locus standi. The amount claimed from Investec, excluding the price of the Randgold shares, has thus reduced marginally – from R1.36 billion to R1.3 billion, or by 4.3%.
In terms of the court’s ruling, only the person whose name appears on the share register has locus standi irrespective of who holds the economic interest in the underlying company. It is not immediately clear what impact the judgment will have for other shareholders holding millions of Randgold shares, who may now wish to join the applicants in seeking R288.56 per Randgold share as damages for the loss of value they have been forced to accept.
Some 90% of all JSE- listed shares are held through nominees, not in the name of the underlying beneficial owner. So, the beneficial owners of more than 90% of all JSE-listed shares could have no locus standi to resort to the courts in the case of dispute.
R4 billion claim against Investec Bank UK not fully pursued under Investec’s watch
One of Randgold’s claims, not fully pursued under Investec’s watch, was a R4 billion claim against IBUK. This stemmed from IBUK’s role, according to published extracts of Randgold’s own forensic reports, in borrowing in London 5.46 million Randgold Resources (RRL) shares stolen from Randgold by JCI. Part of the security provided by IBUK to JCI was used to pay a long-overdue loan of R79 million from Investec to JCI.
This scheme has so far escaped the scrutiny of the UK’s financial services authorities, possibly because Randgold agreed, as part of a 2010 JCI settlement, that its claims against IBUK and Investec would become “fully and finally” settled. This concession was a precondition for the release of the JCI settlement assets by Investec and the minorities allege that Randgold made the concession under duress.
RNG shareholding (beneficial and institutional) supplied by VACO
