Sun Jun 25 08:50:41 SAST 2017

Rot in Kunene's gold mine led to closure

By Alfred Moselakgomo | 2011-09-28 07:01:10.0

CENTRAL Rand Gold Mine, owned by ex-convicts Kenny Kunene and Gayton McKenzie, has been in the media for the wrong reasons - primarily as a result of over-ambitious claims.

In May this year, the Sunday Times reported that an explosive forensic report by Nexus Forensic Services, which was commissioned by Puno Gold, CRG's empowerment partner as well as interviews with several current and former CRG employees, revealed that:

- CRG's Australian chairman Michael McMahon admitted the company had previously misled investors and urged his chief executive not to make "untrue assertions";

- Kunene and McKenzie used their political connections to get the mining rights in record time;

- Companies linked to the Umkhonto weSizwe Military Veterans Association scooped deals from CRG worth more than R40-million;

- Kunene went from selling fish from the boot of his car to earning R150,000 a month as a stand-in chief executive, while McKenzie earned R243,000 a month, also as acting chief executive; and

- Johan du Toit and his wife, Anne, loaned Kunene R1-million to help him launch his nightclub ZAR.

The forensic report, which was given to the Hawks in February this year, reportedly concluded that "there would appear to be grounds for a case to be answered for fraud".

Since March, the mine and other industry stakeholders have held four meetings with the Department of Water Affairs to clarify and agree on the technical principles, funding allocation and timing of the implementation of an interim solution to the acid mine drainage problem that was experienced in the central basin of the Witwatersrand area.

The mine was also accused of failing to disclose to shareholders, who have sunk R1.67-billion into it, that the government was considering shutting it down.

The mine was shut down by the State on Monday.

CRG raised more than R1-billion after listing on the London and Joburg stock exchanges in 2007 for a mine that was meant to improve the lives of Soweto's poor.

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