Home News Zuma nephew ordered to pay $1.25 mn in mine dispute

Zuma nephew ordered to pay $1.25 mn in mine dispute

Published on 12/01/2012

A South African court on Thursday ordered a nephew of President Jacob Zuma to pay $1.25 million to a security company that guarded now-liquidated gold mines he co-owned with a grandson of Nelson Mandela.

The pair’s mining company, Aurora Empowerment Systems, is accused of running two gold mines into the ground and causing more than 5,300 workers to lose their jobs.

A high court judge ruled that Khulubuse Zuma, chairman of Aurora and the president’s nephew, had failed to honour a settlement agreement with Protea Coin Group security company under which he was supposed to pay the firm more than 12.1 million rand ($1.5 million, 1.2 million euros) after the mines went under.

Zuma only paid back a small portion and was ordered to pay more than 10 million rand in overdue money plus 15.5 percent interest and court costs.

Aurora folded in October last year, with liquidators expected to claim 1.7 billion rand ($210 million, 164 million euros) from the company.

Aurora’s directors included Khulubuse Zuma; Zondwa Mandela, a grandson of the country’s first black president; and Michael Hulley, who is President Zuma’s lawyer.

The saga has stoked criticism of nepotism and dirty dealing in the ruling African National Congress (ANC).

Aurora was appointed to take over the mines after previous owner Pamodzi was liquidated in 2009.

Mineworkers’ salaries went unpaid during the two years Aurora ran the mines. A trade union claimed one even killed himself by drinking rat poison because of his money troubles.

The mines’ infrastructure was stripped and they were abandoned except for illegal miners, four of whom died in an apparent shoot-out with security guards last August.

Khulubuse Zuma claimed to have paid over salary money, but this never reached workers. Known for his playboy lifestyle, the businessman came under fire last year for pledging one million rand (97,000 euros, $123,000) to the ANC.