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WSL - Wescoal Holdings Limited - Legal Dispute at Khanyisa Colliery

Release Date: 14/03/2011 12:39
Code(s): WSL
Wrap Text

WSL - Wescoal Holdings Limited - Legal Dispute at Khanyisa Colliery WESCOAL HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 2005/006913/06) JSE Share code: WSL ISIN:ZAE000069639 ("Wescoal" or the Company) LEGAL DISPUTE AT KHANYISA COLLIERY Shareholders are referred to the article in the Business Day today regarding a disgruntled contractor, Sutha Civils ("Sutha"), which claims R15, 2 million from Wescoal Mining (Pty) Limited ("Wescoal Mining"), a wholly owned subsidiary of Wescoal. Sutha has also laid a fraud charge against "West Coal Mine", it is assumed that the fraud charge was intended for Wescoal Mining. The fraud charge appears to relate to Sutha`s belief that there are discrepancies in tonnages reported to the market and what was actually produced at Khanyisa. No further information regarding this charge has been made available to Wescoal. Sutha is threatening to apply to court for a liquidation order against Wescoal Mining tomorrow. Wescoal would like to advise shareholders of the following facts: * Sutha commenced mining in February 2010 and during the period February to July 2010 it came to the Company`s attention that there were numerous issues relating to overcharging by Sutha; * By July 2010 Sutha had not responded to or corrected these issues; * During September and October 2010 there were irregularities regarding diesel use by Sutha; * On a mine visit in November 2010 Wescoal instructed Sutha to stop mining overburden and only extract coal, which Sutha ignored; and * Sutha was instructed to cease mining operations at Khanyisa in December 2010. Wescoal has obtained legal advice that Wescoal Mining does not owe any money to Sutha and Wescoal Mining is considering instituting a civil claim against Sutha for approximately R3, 5 million. Wescoal Mining categorically denies discrepancies between tonnages reported to the market and actually produced. Any application for liquidation of Wescoal Mining is totally unfounded and malicious and will be opposed. 14 March 2011 Johannesburg Sponsor Exchange Sponsors Date: 14/03/2011 12:39:00 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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