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South Africa: Mustek in Contempt, Says Puno
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Business Day (Johannesburg)
9 May 2008
Posted to the web 9 May 2008
Lesley Stones
Johannesburg
LISTED technology company Mustek has been accused of contempt of court by its black empowerment partner Puno, which is challenging the legality of Mustek's move to repossess Puno's shares in its business.
The allegation is the latest clash in a spat caused by Mustek's efforts to buy back a 30% stake that Puno holds in its Brotek subsidiary.
Puno has applied for leave to appeal against a high court verdict that gave Mustek the right to repossess the 3417 shares, after a judge ruled that Puno had breached a loan agreement.
Despite the continuing legal action, Mustek transferred the shares to Tradeselect, another of its subsidiaries. Mustek told Puno it could expect to receive just R1,7m after it deducted its own legal expenses and repaid the interest-bearing loan that let Puno buy the shares in 2005.
Yesterday, Puno's lawyer at Werksmans Attorneys sent Mustek a letter saying its action was in contempt of court and "invalid" because it violated their original loan agreement.
Mustek CEO David Kan was the sole director of Tradeselect, and no money seemed to have changed hands, Puno said. That meant the move was not a genuine arm's-length transaction but merely a ploy to avoid Mustek's obligation to sell the shares to a third party at a proper price.
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Even if Mustek was entitled to dispose of the shares, it had a duty to achieve the highest possible price. Selling them for less than fair value would violate that duty, yet Puno was not consulted on the price and an auditing firm was not called in to assess their worth, Puno said.
Puno has asked Mustek to explain whether the shares were sold or given away, who set up the deal, who Tradeselect's shareholders and directors are, and how it is related to Mustek.
It has also objected to a threat by Mustek to lay defamation charges against John Poluta, Puno's spokesman during the clash. It was incomprehensible that Mustek could threaten Poluta with defamation for disclosing facts , Werksmans said.
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