TIDMCRND
RNS Number : 7177U
Central Rand Gold Limited
11 April 2016
Central Rand Gold Limited
(Incorporated as a company with limited liability under the laws
of Guernsey,
Company Number 45108)
(Incorporated as an external company with limited liability
under the laws of South Africa,
Registration number 2007/0192231/10)
ISIN: GG00B24HM601
LSE share code: CRND JSE share code: CRD
("Central Rand Gold" or the "Company")
HIGH COURT OF SOUTH AFRICA UPHOLD APPEAL IN FAVOUR OF CENTRAL
RAND GOLD LIMITED
AND
CONFIRMATION OF REGISTERED ADDRESS
Further to previous communication on the protracted dispute with
Puno Gold Investment Proprietary Limited ("Puno"), the Company
would like to advise shareholders that the High Court of South
Africa has upheld the Appeal brought by Central Rand Gold Limited
and its subsidiaries, in relation to the Judgement of the Supreme
Court handed down in February 2015. The High Court of South Africa
found that the debt had not 'prescribed' and that the full facts of
matter must be reconsidered by the Supreme Court in order to
provide a judgement relating to the funding dispute between the
Company and Puno. Further, the High Court of South Africa has
awarded a cost order in favour of Central Rand Gold.
The Company and its Counsel remain confident of the strength of
case and will keep Shareholders fully informed as the matter
progresses in the Supreme Court.
Background to the Funding Dispute with Puno Gold Investment
Proprietary Limited
During 2007, a dispute arose between Central Rand Gold Limited
and Puno Gold Investment Proprietary Limited, in their capacity as
shareholders of Central Rand Gold South Africa ("CRGSA") in regard
to the allocation of intercompany loans which fund the budget and
work programme carried out by CRGSA.
Subsequently, on 16 February 2009, Central Rand Gold Netherlands
Antilles ("CRGNV"), the direct holding company of CRGSA, exercised
the call option granted to it in terms of the Shareholders'
Agreement and gave Puno 90 days' notice to acquire Puno's entire
interest in CRGSA ("the call").
During April 2009, Puno made an urgent application to the South
Gauteng Division of the High Court of South
Africa to interdict CRGNV from proceeding with the call pending
the final determination by arbitration of the validity and
enforceability of:
(1) the various funding calls made by CRGSA and the consequent call; and
(2) the interpretation of the shareholder funding provisions of
the Shareholders' Agreement. (together the "Funding Dispute")
The parties agreed that the matter would proceed to arbitration
as sought in the application. Puno, in its capacity as claimant in
the matter, delayed and ultimately failed to bring the matter
before the Arbitration Foundation of South Africa ("AFSA") and,
consequently, in an effort to expedite matters, CRGNV and CRGSA
approached AFSA as respondent requesting that an arbitrator be
appointed and that arbitration proceedings commence. In response to
this request during September 2010, AFSA advised the Company that
it would indeed appoint an arbitrator and Judge Lewis Goldblatt was
subsequently appointed.
During October 2010, however, Judge Goldblatt found that the
matter could not proceed to arbitration as the matter was not
brought before him by the claimant in the matter ("Puno") but
rather was sought to be brought by the respondent ("Central Rand
Gold"). As such, the arbitrator was of the view that he had not
been properly appointed.
Following from this finding, Puno indicated its intention to
challenge the validity and constitutionality of the CRGSA
Shareholders' Agreement despite having based various of its court
applications thereon - including the application brought in the
South Gauteng High Court, Johannesburg, South Africa, against
CRGNV, the Company and CRGSA, in which it sought to interdict CRGSA
from proceeding with mining operations pending an arbitration award
or court order on the proper interpretation of clause 18 of the
CRGSA Shareholders' Agreement. This ultimately failed as the High
Court of South Africa found that Puno had failed to make out a case
for the relief sought on each and every ground which formed the
subject of the application hearing.
There continues to be no resolution to the dispute relating to
the shareholder funding provisions of the CRGSA
Shareholders' Agreement ("Shareholders' Agreement") entered into
between CRGNV and its current Black Economic Empowerment ("BEE")
partner, Puno.
Following from the above, and due to the inaction of Puno in
bringing matters before the Arbitration Foundation of South Africa,
CRGNV and CRGSA filed an application with the High Court of South
Africa ("Application"), following which the papers were served on
Puno by the Sheriff of the High Court of South Africa.
This application sought to discharge the interdict obtained on
13 May 2009 prohibiting CRGSA and CRGNV from proceeding with an
option to call for Puno's entire shareholding in CRGSA, and in the
alternative requested that a court order be granted appointing an
arbitrator to arbitrate on the dispute between the parties and
furthermore stipulate the time period within which such arbitration
needs to be conducted to completion.
Following this, Puno subsequently filed a notice of intention to
oppose the application and the matter was set down for a hearing on
the opposed roll, with a court date in May 2013.
However, late intervention and filing of new papers by Puno's
new legal team resulted in this hearing being moved to December
2013. After hearing the facts of the cast, the initial Judgment
failed to correctly consider the arguments proffered by the
Applicants and as a consequence the Company was unsuccessful in its
Application. Rather the Court found that the claim was a debt which
had 'prescribed'.
In August 2015, the Company appealed to the High Court of South
Africa to have the determination that the debt had 'prescribed' to
be set aside. The Company has been successful in this Appeal, with
all three High Court Judges finding that the debt had not
'prescribed'. In accordance with the ruling of the High Court of
South Africa, the matter will be referred back to the Supreme Court
to fully consider the facts of the Funding Dispute with Puno.
The Company and its Counsel remain confident of the strength of
case and will keep Shareholders fully informed as the matter
progresses in the Supreme Court.
Confirmation of registered address
In addition, the Company today confirms that the registered
office of the Group is:
Trafalgar Court
2nd Floor
East Wing
Admirial Park
St Peter Port
Guernsey
GY1 3HU
This change has been effective since 2011.
For further information, please contact:
Central Rand Gold +27 (0) 87 310 4400
Allen Phillips / Nathan Taylor
Panmure Gordon (UK) Limited - Nominated Adviser & Broker +44
(0) 20 7886 2977
Adam James / James Greenwood
Merchantec Capital - JSE Sponsor +27 (0) 11 325 6363
Marcel Goncalves / Monique Martinez
Jenni Newman Public Relations Proprietary Limited +27 (0) 11 506
735
Jenni Newman
Johannesburg
11 April 2016
This announcement does not constitute, or form part of the
Placing or any invitation to sell or issue, or any solicitation of
any offer to purchase or subscribe for, any shares in the Company
nor shall this announcement or any part of it, or the fact of its
distribution, form the basis of, or be relied on, in connection
with or act as any inducement to enter into any contract or
commitment whatsoever with respect to the Placing or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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