Moneyweb (Johannesburg)

South Africa: Mark Wellesley-Wood: Chairman, Durban Deep

broadcast transcript

Well, the saga continues - the Durban Roodepoort Deep saga, that is.

Miningweb's editor, David McKay, will bring us up to date. David?

DAVID MCKAY: Well let's just have a recap of what's happened over the last breathless few days. We've had Wellesley-Wood, the chairman of DRD, find out over the weekend that he couldn't re-enter South Africa on business because his work permit papers weren't in order, much to his surprise. And then yesterday Roger Kebble, who's a deputy chairman at DRD, had his executive duties suspended and the reason for that was the involvement in an Indonesian gold mine several years ago, by DRD in Indonesia, which ended up being highly detrimental to DRD shareholders. But we also found out through this that JCI and CAM, companies with whom Roger Kebble is connected, owe DRD about R32m from a previous transaction. Now, today the information that came to light was that there was an unsuccessful attempt to remove Wellesley-Wood from the DRD board.

Now you don't have to be a rocket scientist to realise that there's a tremendous power struggle taking place at the heart of DRD, and we've got in one corner Roger Kebble and the other Wellesley-Wood, the man who was brought in to restore matters, Alec, after Roger Kebble.

MONEYWEB: Thanks to David McKay from theMiningweb.com. Mark Wellesley-Wood joins us now from London. Second night in a row. This board meeting, at which it was attempted to get rid of you as chairman, Mark - when was this board meeting called?

MARK WELLESLEY-WOOD: It was called very late yesterday. The papers went out at about 5pm yesterday evening, but obviously several of my board members are dotted around the world, so really we could only focus on it this morning. So it was a bit of an urgent surprise board meeting. Yes.

MONEYWEB: Clearly you managed to connect remotely. What actually happened at the board meeting?

MARK WELLESLEY-WOOD: Well, although David said in his introduction that it was all about an attempt to remove me, that was never put to the board. I'm pleased to say that I have the unanimous support of all my directors, in my capacity as continuing as chairman and chief executive officer. The questions really surrounded my ability to continue to perform my duties and my role, in light of the Home Affairs ruling. And obviously several directors were concerned that this was a corporate governance breach and that the prohibitions imposed on me would prevent me from doing my job. I'm pleased to be able to say that I'm staying on, so I'm pleased to be here. And obviously still very sad that I'm not back in South Africa.

MONEYWEB: That sounds all jolly, but what about this gent, Grant Fischer.

Apparently he put to the board certain documentation that he had from Home Affairs that in fact the rest of the board, including yourself, had not seen.

MARK WELLESLEY-WOOD: Yes, it would seem as though Grant took it upon himself to intervene with Home Affairs - I don't know on whose behalf, and in particular it looks as though he's in possession of certain letters which the company and myself were not in possession of, which he really wasn't able to explain.

MONEYWEB: But he was using those letters, Mark, in the attempt to get you to step down. That doesn't sound to me like quite the non-controversial spin that you're putting on it right now.

MARK WELLESLEY-WOOD: Well, I think Grant seems to have taken it on himself to go and seek a legal opinion from a firm of attorneys and to contact Home Affairs and to receive documents on my work permit application. And, as I said, there were only presented to us overnight. I think a number of directors on the board did question his motives, as to why he was doing this, and Grant really wasn't able to explain the situation other than the fact that as a non-executive director he was just making due enquiry and was concerned for the company.

MONEYWEB: Just to confirm this. He didn't come to you as the chairman and say: "This is the information in my possession, can you explain it?"

MARK WELLESLEY-WOOD: Well, it's even more irregular than that, Alec. I mean, I had a meeting booked with Grant Fischer on Thursday when I was in South Africa because, you recall, there were a number of sensitive issues the company was facing with regard to Roger's position, Rawas, the R32m with JCI, CAM - the issues that David's been going on. I mean these just haven't broken out this minute, these have been things we've been working on for months, and I was briefing non-executives. Grant Fischer cancelled that meeting, and didn't see me, and doesn't seem to have seen it fit to pick up the phone and speak to me to discuss these matters, or indeed speak to any of the executives in DRD as to what was going on.

MONEYWEB: Well he didn't put to the board that he wanted your resignation.

That you've explained to us, but certainly it appears as though that was the direction he was heading in. Have you called for his resignation from the board?

MARK WELLESLEY-WOOD: The board did take various steps to put on record that they didn't approve of Mr Fischer's behaviour, and that view was expressed by the majority of the board, although that was not unanimous. And clearly there are matters arising both from my work permit application and obviously the board composition that I think we've now got to take stock of .

MONEYWEB: In that vote on Mr Grant Fischer, was Roger Kebble one of those who voted against ... . Non-unanimous.

MARK WELLESLEY-WOOD: I won't discuss people's individual positions. I mean those are confidential to board meetings. But suffice it to say that several directors did express concerns, as I think is right in this way, in terms of the actions of one particular director which seem very strange to anybody who reviews them.

MONEYWEB: You said earlier that there was unanimity in you staying on as chairman - including Roger Kebble, who's now suspended?

MARK WELLESLEY-WOOD: Correct. That is correct and, at the same time we did discuss the procedure for the enquiry into the Rawas transaction, which will be lead by one of my non-executive directors, David Baker, who is independent and hasn't been involved in the past history. So Roger will get a completely fair and free and just hearing.

MONEYWEB: But Mark, I don't understand. If he was suspended as a director what was he doing at the board meeting?

MARK WELLESLEY-WOOD: He is still a director. He hasn't been removed as a director. He's been suspended from his executive duties. The two roles, the two hats the directors have - one is an executive manager and one is a director.

And it's only his executive hat that has been suspended.

MONEYWEB: In the last few days, in fact in the last few weeks, there have been a number of directors of Durban Deep selling shares. Now, in a case like that is it necessary for them to clear those share sales with you or to give you some explanation of why they are doing so?

MARK WELLESLEY-WOOD: No. We don't interfere in individuals' decisions to handle their own investments. If people exercise their share options we take no view on the price, we don't give any advice and we don't intervene. It's for themselves. And while I'll happily answer questions about my own actions, again you have to ask the directors concerned what they're doing with their own stock.

MONEYWEB: But as the chairman of the company, is there not a corporate governance issue here? You are in the process on the Indonesian mine, Rawas, as you said earlier, in proceeding against certain parties who happen to be on your board. Surely for corporate governance reasons they should have been perhaps more circumspect in these sales?

MARK WELLESLEY-WOOD: I think the Rawas announcement we made on Monday - obviously it would be improper to have dealt either ahead of that announcement or within our sort of closed period. We do have closed periods, and from time to time I will tell directors - if something is coming up - that it's not sound for them to deal and that prohibition is put in place.

MONEYWEB: But Roger Kebble sold shares on Friday. The announcement was on Monday. You said you shouldn't have dealt ...

MARK WELLESLEY-WOOD: As I think, in fairness to Roger, he wasn't aware of the announcement at that particular point in time. This Rawas transaction has been going on for some months, in fact even some years, so I mean to say, what would he have dealt on at any particular time, because of Rawas, what it would have prohibited in dealing for the last two years, just about.

MONEYWEB: Indeed. Mark, just to close off with - any progress from the Department of Home Affairs? We had the Minister on the programme last night.

He said you can appeal to him.

MARK WELLESLEY-WOOD: Yes, thanks very much for that. I'd like to express my gratitude to the Honourable Minister, because I believe my lawyers are meeting with officials tomorrow. I very much appreciate the right to appeal, and I'm now very confident that the matter can be resolved speedily and efficiently.

Thank you.

MONEYWEB: No further issues have been provided to you that in this matter - in other words, other issues that might have given Home Affairs the reason to act as heavy-handedly as it has?

MARK WELLESLEY-WOOD: I don't know how they've acted. Equally, I've been offered no reasons and I've got no facts, so I'm in the dark as much as the Honourable Minister was yesterday. And the whole thing has just been perplexing to me.

MONEYWEB: We look forward to seeing you back in the country in the not too distant future. Mark Wellesley-Wood, the chairman of Durban Deep.

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