20100122
allafrica

Johannesburg — RANDGOLD & Exploration (R&E) said yesterday it had reached a settlement agreement with JCI, which could finally lay to rest the long-running dispute between the two companies over R&E assets plundered when both embattled companies were being run by the late mining magnate, Brett Kebble.

The end of the marathon dispute - which began and intensified soon after massive fraud was uncovered at R&E after the ousting of Kebble and his subsequent murder in 2005 - could see R&E shareholders benefiting from R1bn in unlocked value.

R&E spokesman Brian Gibson said the settlement agreement had been signed in the early hours of yesterday morning, with the support of key JCI and R&E shareholders. The matter still has to go before shareholders of both companies in coming weeks for final approval.

Gibson said the settlement was good news for R&E shareholders, who had waited patiently for the resolution of a squabble that had eroded value.

JCI and R&E were both delisted from the JSE in August 2005 for noncompliance.

Gibson said that according to the agreement, reached hours ahead of R&E's annual general meeting yesterday, JCI would issue 1,55-billion new shares directly to R&E shareholders.

The shareholders will also benefit from the unbundling of R&E's 305-million shares in JCI, and will get the 6-million shares JCI holds in Gold Fields . The distribution of JCI and R&E shares was worth about R1bn, Gibson said.

R&E made an initial multibillion-rand claim against JCI in 2005 after forensic auditors uncovered massive fraud following the departure as CEO of Kebble, who had run both firms.

JCI and R&E were managed by Kebble until shortly before his murder in September 2005. After his death a complex web of fraudulent intercompany transactions was uncovered during a forensic probe.

The latest settlement comes after several failed attempts to end the dispute, including moves to merge the companies last year. The merger proposal had required a 75% vote in favour, but minority shareholders representing 38% of the shares, led by businessman Monty Koppel, voted against it.

Koppel and other JCI shareholders had previously blocked any settlement proposals because the merger did not meet their particular concerns related to a separate dispute with Investec.

"The situation is that Koppel's concerns have now been addressed and he has pledged to support the settlement. However, the fat lady hasn't sung yet but we are well on our way to finalising the final settlement. In principle, this is very close to being a done deal," said Gibson.

JCI CEO Peter Gray welcomed the settlement, saying it paved the way for both companies to move on. "The settlement is reasonably fair for everybody, and is good for both companies because they can now move forward after five years of wrangling," he said.

R&E said yesterday that it "remained focused on the recovery of assets allegedly misappropriated, while simultaneously protecting and growing the company's asset base".

Gibson said the company - which has several valuable prospecting rights - would seek to resume trading on the JSE after the settlement.