Gold Circle -PGI Dispute: More Delays

Arbitration postponed indefinitely

Gold Circle’s long-running legal battle with Phumelela Gaming & Leisure Limited over its ownership of, and revenue streams emanating from investments on the Isle of Man, amounting to some R238 million, has received a further setback with the news that the arbitration hearing due to commence on Wednesday 6 April has been postponed indefinitely.

Phumelela Business Rescue Practitioner John Evans reports that the hearing has been delayed due to Gold Circle, inter alia, not being ready, amending its statement of claim and replication and introducing new witness statements.

Evans says that the matter has thus been postponed to deal with a number of interlocutory applications arising out of the late filing of these amendments, witness statements and to determine who would be liable for the costs of the postponement.

Until then no new dates can be agreed for the hearing of the dispute.

Gold Circle had not responded to the Sporting Post’s request for a comment on the matter as we went to publication.

In May 2020, Phumelela Gaming and Leisure Limited was placed in business rescue. Evans was appointed business rescue practitioner and on 1 September 2020, the creditors of the company voted to adopt a business rescue plan.

Amongst others, the plan contemplated the sale by Phumelela of 100% of the issued shares in Phumelela Gold International Limited (PGI, a company registered in the Isle of man) to Mary Oppenheimer Daughters (Pty) Ltd (MOD).

What was thought to be common knowledge in the industry – but since disputed – is that Phumelela owned 61% of the shares in PGI, and Gold Circle 39%.

When Gold Circle established that the business rescue practitioner intended to sell their shares in PGI, they went to Court in Johannesburg to interdict the process on an urgent basis. The Judge held that the case lacked urgency and refused to hear it.

Ultimately the BRP formally rejected Gold Circle’s claim to its shares in PGI. This rejection came after months of representations and negotiations.

Some sense eventually prevailed and all parties agreed on an arbitration process to adjudicate the dispute.

Judge Johan Kriegler, pictured above,  was nominated and accepted to be the Arbitrator for the proceedings which were originally to have commenced on 11 October 2021.

Gold Circle informed Members that due to time constraints, late and non-discovery of documentation by Phumelela, and the determination that the dispute would not be completed in the time-frame, the arbitration was postponed 24 April 2022.

The KZN racing operator said at the time that, whilst disappointing, given the circumstances, this was the best outcome for the company.

As at 30 September 2021 Phumelela reportedly held R238 million which, dependant on the outcome of the now postponed arbitration, could be due to Gold Circle.

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