Sentula Said to Identify Assets to Recover Money After FraudBy
Mining company seeks cash equivalent to current market value
After five years of losses, Sentula is overhauling business
Sentula Mining Ltd. has identified assets that could be sold to recover some of the 383 million rand ($30 million) in civil damages being sought from a former director, the first significant progress in the case since the amount was awarded more than six years ago, according to a person familiar with the matter.
It’s not yet clear how much of the money can be recouped, the person said, asking not to be identified as the information hasn’t been publicly announced. The shares have rallied 31 percent this month.
The total amount sought in the litigation is almost equivalent to the Johannesburg-based company’s market value of 397 million rand and comes as Sentula prepares to transform from a contract-mining company to an investment-holding firm. After making losses for five straight years, Sentula is selling assets to raise funds for acquisitions as part of the overhaul, with its name expected to change to Unicorn Capital Partners Ltd. after a shareholder vote next month.
Sentula won a civil suit in the South Gauteng High Court in South Africa in November 2010 seeking 88 million rand from Casper Scharrighuisen for defrauding the company. A judgment for another 171 million rand plus interest of 124 million rand against the former director was made in May 2011. The company on March 31 said it has instituted legal proceedings in the Netherlands, the British Virgin Islands and Curacao to locate and secure Scharrighuisen’s assets. Attempts to locate a contact number for Scharrighuisen weren’t successful.
The stock has rallied 62 percent this year, the third-best performer in the FTSE/JSE Africa Fledgling Index of some of the country’s smallest stocks. That’s a better return than any of the 164 companies on the Johannesburg Stock Exchange’s all-share gauge, which is up 6.5 percent in 2017. Sentula has dropped in seven of the 10 years through 2016, losing more than 98 percent of its value in the period.