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The appointment by Asa Resources Plc (formerly Mwana Africa) of a South African director, barred from joining boards in his country, to the board of its gold producing subsidiary, Freda Rebecca, has raised eye brows. Asa appointed Gordon McCrae to the Freda Rebecca Board at the annual general meeting, which ousted founding chief executive Mr Kalaa Mpinga in June this year.
Mr MaCrae is said to be running the show at Asa’s Zimbabwean gold mine in Mashonaland Central Province alongside fellow South Africans, Paul Wheeler and Jan Lampen. Information obtained by The Herald Business indicate that Mr MaCrae’s was once charged for fraud, causing harm to a company and repeated failure to pay subcontractors for work done.
An MDM Ferroman director, Mr McCrae, and two other employees, Olivier Samuels and Ockert van der Merwe, were arrested on charges of fraud on March 19 in 2007. As a result of the charges he was barred from joining boards in South Africa.
The decision to appoint the South African with a checkered history relating to company finances, were effected when China International Mining Group Corporation, through its associate Ning Yat Hoi, ousted founding CEO Mpinga at an AGM.
Fears abound that Freda could also be losing money under unclear circumstances, amid perceived occurrence of events similar to what transpired at MDM when contractors would not be paid for contracted work executed.
According to SA media reports a report to creditors of the liquidated engineering group, MDM Ferroman, made back in 2007 showed a mountainous R650 million ($90,4 million) of liabilities compared with total assets of merely R1,3 million.
The collapse of MDM was surprising as it came at a time of inflation in contractor costs and when the commodities boom had generated dozens of new projects that created long waiting lists for services and equipment, the reports say.
According to the second auditor’s report MDM Ferroman appeared to have been struggling with its cash flow for a long time and all, but a few of its last contracts were run at huge losses.
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