Anglo stock hit by class action suit
April 7, 2003
By Max Gebhardt
Johannesburg - Shares in Anglo American and Sasol fell sharply on Friday after it was disclosed that US lawyer Ed Fagan and local representative John Ngcebethsa were planning to file a class action suit for damages against Anglo and Fluor, a US company that worked with Sasol, for their role in human rights abuses during apartheid.
The lawyers are expected to make an application to have the case heard in the southern district of New York.
Ngcebethsa and Fagan are also suing several Swiss banks for their role in apartheid, and are seeking damages of $6.1 billion from Anglo for human rights abuses.
The lead plaintiff in the application is a former Anglo American employee Dywele Daluhlanga who Ngcebethsa said had worked in Anglo's mines for 15 years, and after he had been injured in a rockfall had been "dumped like a dog". The lawyers will seek damages for 100 000 Anglo employees employed before 1994.
When the news hit the markets Anglo shares fell a dramatic 3.2 percent as did Sasol's, which fell 1.7 percent, outpacing the overall market, which dropped 0.6 percent.
In response Anglo issued a strongly worded statement released on Friday, which said it "strongly rejects the efforts made by US lawyers and others to use US courts to resolve important issues for South Africa's future".
Michael Spicer, an executive of Anglo American, described the report in an interview with Business Report on Saturday as a "one-eyed monochromatic vision of the past which doesn't get to grips with the complexity" of apartheid
.
Anglo said it was participating fully in the ongoing debate to find the best ways to rebuild South Africa.
It said this debate should take place by South Africans and not with lawyers trying to find a resolution in foreign courts.
If successful, Ngcebethsa said the money would be placed in a reparations fund that would be used to uplift those areas that suffered under apartheid.
When asked if he would be concerned that a claim of $6.1 billion, just over a quarter of Anglo's yearly revenue, would potentially damage and perhaps lead to the closure of Anglo along with the impact this could have on its employees, Ngcebethsa said the company had unjustifiably enriched itself and should be held to account.
Sasol said it had not received any notice of an application against it and as such had no comment.
The claims for damages follows a Truth and Reconciliation Commission (TRC) report, which said companies such as Anglo and others could be sued for damages for human rights abuse.
"A reparations claim against corporations like Anglo American would be based on the extent to which decades of profits were based on systematic human rights violations," the TRC said.
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