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CENTRAL RAND GOLD LIMITED - High Court of South Africa uphold appeal in favour of Central Rand Gold and confirmation of Registered Address

Release Date: 11/04/2016 09:15:00      Code(s): CRD       PDF(s):  
High Court of South Africa uphold appeal in favour of Central Rand Gold and confirmation of Registered Address

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: GG00B92NXM24
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.

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