| Wed 4 Aug 2010, 13:30 | | WEZ - Investigation completed into alleged corporate governance issues at |
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WEZ
WEZ
WEZ - Investigation completed into alleged corporate governance issues at
Wesizwe
Wesizwe Platinum Limited
(Incorporated in the Republic of South Africa)
Registration number 2003/020161/06
JSE code: WEZ
ISIN: ZAE000075859
("Wesizwe" or "the Company")
Investigation completed into alleged corporate governance issues at Wesizwe
Wesizwe Platinum Limited ("Wesizwe" or "the Company") today announced that
its Board of Directors has accepted the final report from independent
auditors, Deloitte & Touche, and the legal firm, Deneys Reitz Attorneys ("the
Deloitte and Deneys Reitz reviews") following an investigation into
allegations of corporate governance misdemeanours at the Company.
The Deloitte and Deneys Reitz reviews concluded that there is no evidence of
fraud, material financial loss, theft or a material breach of fiduciary duty
on the part of the Company`s Chief Executive Officer, Michael Solomon.
The Deloitte and Deneys Reitz reviews further confirmed there was no evidence
of impropriety in the decision-making and reporting of a bonus paid to
Michael Solomon and recommended to the Board that any further investigation
into the matter be terminated.
During the second half of 2009, Wesizwe experienced a number of significant
changes to its Board. The most notable of these was the unprocedural
dismissal of the Acting Chairperson, Robert Rainey, and CEO Michael Solomon
at a Board meeting in November 2009 on allegations of misconduct and
corporate governance transgressions. In December 2009, both Solomon and
Rainey were reinstated by shareholders at an Extraordinary General Meeting
(EGM).
Dawn Mokhobo, who was appointed Chairman after the EGM, commented: "At our
first Board meeting after the EGM the newly constituted Board agreed to
appoint independent forensic experts to conduct an investigation into the
allegations against Michael Solomon and Robert Rainey. These allegations were
first highlighted in an Internal Audit report dated 25 November 2009. This
was then extended into a review commissioned by the previous Board and
performed by the same experts, Deloitte and Deneys Reitz, the findings of
which were presented to the EGM in December 2009."
The final Deloitte and Deneys Reitz report confirmed that the Internal Audit
report of November 2009 was flawed in a number of respects. The chief amongst
these, as articulated in their Conclusions and Recommendations Summary
Report, was that it was compiled:
- ".without affording MS (Mike Solomon) an opportunity to refute the
allegations emanating from the Internal Audit Report. As such, the
Internal Audit Report was effectively a set of allegations dating back
to 2007. Had the report been completed, then the matter would not have
warranted so much of the attention of the board of directors of the
Company ("Board")."
This resulted in information used for the first review being inconclusive.
In specific reference to allegations that Solomon had used his corporate
credit card to fund private helicopter flying lessons, purchase oysters for
his private use, purchase jewellery for his wife and used his corporate card
to purchase groceries for personal use, the Conclusions and Recommendations
Summary Report found that:
- "Deloitte & Touche could not find any evidence to substantiate the
allegations that the Company paid for helicopter flying lessons for MS".
- That the use of helicopters was standard industry practice and both cost
effective and "convenient in cases where a number of investors,
journalists, etc, were taken on site visits".
- "Deloitte & Touche identified two transactions concerning the purchase
of oysters. In the one transaction (value R741,00), MS (Mike Solomon)
paid for it himself. This transaction merits no further discussion. In
the second transaction (value R750,00), the oysters were bought from a
firm in Saldanha Bay, and not Knysna (as alleged in the Internal Audit).
At the time MS (Mike Solomon) was hosting approximately 20 dignitaries
from the World Economic Forum at his residence at Riebeek Kasteel and
the oysters were served to his guests. Deloitte & Touche concluded that
the expenditure was business related."
- They were unable to reach a conclusion on a R984,47 Woolworths grocery
purchase claimed for hosting members of a platinum company from the
adjacent property because they were "unable to locate the credit card
voucher relating to the purchase", but noted this had been approved by
the former chairman.
- "Deloitte & Touche could not find any transaction where MS (Mike
Solomon) bought jewellery for his wife and it is not clear where this
allegation comes from."
The Deloitte report did highlight the need to address certain policies,
procedures and record keeping within the Company, and a process to improve
these aspects of the business was implemented. A number of new regulations
and systems have been introduced as Wesizwe aims to ensure compliance with
King III.
The Wesizwe Board has deliberated extensively on the Deloitte and Deneys
Reitz reviews and has resolved to bring this matter to an end.
The Chairman said: "I am pleased to say that this turbulent chapter in our
Company`s history has now been resolved and is firmly behind us. The report
made a number of recommendations to strengthen our internal financial
controls which we have implemented. I am convinced that we have emerged with
a strengthened Board and a highly capable executive team in place to drive
the Company`s strategy and deliver value to all our shareholders."
Cautionary Announcement
Investors are advised that the cautionary announcements dated 24 May 2010 and
6 July 2010 remain in force. Therefore, investors are advised to exercise
caution in dealing with securities of the Company.
ENQUIRIES:
Dawn Mokhobo, Chairman, Wesizwe Platinum Limited, Mobile: 0838003714
4 August 2010
Sponsor: Investec Bank Limited
Date: 04/08/2010 13:30:01 Produced by the JSE SENS Department.
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