JCI fee to Investec ‘fiction’

In Letšeng Diamonds v Investec, JCI and others, where the first stage of the legal battle was heard last week by the Johannesburg High Court, several affidavits have been presented which question what went on at a board meeting of JCI held on August 23 2005. This has already been heavily contested in affidavits deposed by Montague Koppel, representing Letšeng Diamonds. Peter Gray, who replaced the late Brett Kebble as CE of JCI on August 24 2005, claimed: ‘JCI\'s old board approved the ILA (Investec Loan Agreement) on August 23 2005’. However, since initiating his case in September last year, Koppel has tirelessly campaigned for proof that this was indeed the case. The ILA provided for a formula-based profit-sharing fee to Investec, currently worth around R500m. In an affidavit deposed on April 17 2007, Patricia Beale, erstwhile company secretary at JCI, gives the full and complete version of what the report describes as the infamous JCI board minutes of August 23 2005. What in fact was tabled at the meeting was a ‘Term Sheet’, which detailed the structure of a commercial loan agreement between Investec and JCI. Present at the meeting were JCI directors Roger Kebble, Brett Kebble, Hennie Buitendag, and John Stratton. Charles Cornwall was absent. Also present by invitation, like Gray, was Chris Lamprecht. In affidavits, Lamprecht, Roger Kebble, Buitendag and Gray have confirmed to Koppel what Beale had said in an earlier affidavit, viz, that no initialled draft of the ILA itself, nor indeed any draft agreements were tabled at the JCI board meeting of August 23 2005 or initialled at the meeting or after. While these and other merits were placed before the court, Judge Percy Blieden reserved judgment on the question of locus standi, viz, the standing or otherwise of minority shareholders in the court. If a favourable finding is made, the main case will then proceed. Full Moneyweb report