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Johannesburg – The family of late Bosasa chief executive Gavin Watson have succeeded in overturning a high court ruling ordering it to restore shares in a mining company to South Africa’s ambassador to Japan, Smuts Ngonyama.
On Wednesday, the Supreme Court of Appeal (SCA) upheld an appeal by Watson’s nephew and executor of the controversial businessman’s estate, Jared Watson, and substituted South Gauteng High Court Judge Fayeeza Kathree-Setiloane’s 2019 judgment.
Judge Kathree-Setiloane ordered Jared Watson to immediately take whatever steps are necessary to restore to Ngonyama’s company Thunder Cats Investments 92 shares that were substituted for a stake donated by the former ANC spokesperson to Bosasa Youth Development Centres.
The high court said all dividends earned plus 10% interest a year from the date when the shares were donated and first registered in Bosasa Youth Development Centres’ name must also be restored to Thunder Cats Investments.
The dispute emanates from an agreement between Ngonyama, Watson and businessman Sabelo Macingwane to each take up 33% shareholding in a company that would have a stake in a mining company that prominent and influential businessman Saki Macozoma intended to establish.
The company, Quantum Leap Investments 715, was set up in 2003 and later became Nkonjane Economic Prospecting and Investment, and took up an opportunity in manganese mining through Macozoma’s Ntsimbintle Mining.
Nkonjane’s stake in Ntsimbintle was valued at R132 million at some point.
Ngonyama, Watson and Macingwane later agreed to equally give up 3.33% each in order to meet their company’s black and female empowerment objectives.
Ngonyama, Macingwane and Watson subsequently increased their empowerment contribution to 8.33% each and identified Bosasa Youth Development Centres as Nkonjane’s empowerment partner after being assured by Watson that it was a BBBEE company.
A Chinese investor later joined Ntsimbintle in 2007 and each shareholder, including Ngonyama, Macingwane and Watson’s Nkonjane, contributed a pro rata share of their stake to facilitate the sale.
Ngonyama and Macingwane later found out in September 2017 for the first time that there were in fact no BBBEE shareholders in Bosasa Youth Development Centres and that this was a wholly owned subsidiary of Bosasa Operations, now known as African Global Holdings.
The former head of the ANC presidency accused Watson of duplicity and treachery and established that one of the ultimate shareholder beneficiaries was the Watson Family Trust.
SCA Judge Mahomed Navsa, with Judges Dumisani Zondi, Anna Kgoele, Glenn Goosen and Owen Rogers concurring, found that the robust approach followed by the high court in resolving all the issues in the matter on affidavit, considering the complexities involved, was not appropriate.
The SCA said a high court order must be framed in terms that are capable of being enforced and that the one granted by Judge Kathree-Setiloane was ineffective and could not be executed.
”In relation to the ownership of the shares, the high court ought to have appreciated that without the involvement of Bosasa Youth and other interested parties, this issue could not effectively be resolved,” the country’s second highest court found.
Ngonyama and Thunder Cats Investments withdrew their claim against Bosasa Youth Development Centres and indicated that they would proceed only against Watson personally in March 2019, five months before he died in an accident in August that year.
Last month, Independent Media reported that Ngonyama and his company had succeeded in stopping the payment by Ntsimbintle of its share of R400m in dividends as they were in imminent danger of losing R6.8m unless they were urgently granted an interdict before Ntsimbintle paid them out.
In his ruling on Ngonyama and Thunder Cats Investments’ bid to stop the payment of dividends to Bosasa Youth Development Centres, South Gauteng High Court Judge Thifhelimbilu Mudau interdicted and restrained Ntsimbintle from paying the dividend to Bosasa Youth Development Centres pending the outcome of Jared Watson’s SCA appeal or any timeously noted and prosecuted challenge to the Constitutional Court of the outcome of Wednesday’s SCA decision.