Knives out for RFP chair Kobeli

…as mining company accuses govt of “unlawfully” installing him on its board

Moorosi Tsiane

THE ruling Revolution for Prosperity (RFP) has been dragged into a bitter corporate and mining dispute after the founding shareholders of Mogopa Mining accused the government of abusing its powers to install party chairperson, Teboho Kobeli, on the company’s board.

Mogopa’s founding shareholders, Christopher More and Phoka Ramoea, have approached the High Court seeking to overturn a November 2023 decision by Natural Resources Minister, Mohlomi Moleko, which they allege unlawfully altered the company’s ownership and governance structure.

At the centre of the dispute is the government’s acquisition of a 20 percent stake in Mogopa and the subsequent appointment of Mr Kobeli and Sekese Sephehi as government representatives on the company’s board.

Mr Kobeli subsequently became chairperson of the Mogopa board.

In his founding affidavit filed this week, Mr More describes the minister’s decision as irregular, unlawful and beyond his powers, arguing that Mr Moleko could not retrospectively regularise share transfers that had previously been found not to comply with statutory requirements.

The minister, the Mining Board, the Minister of Trade, Industry and Business Development, the Registrar of Companies, the Attorney General and Batlokoa Minerals are cited as the first to sixth respondents respectively.

Mr More wants the High Court to review and set aside Mr Moleko’s 1 November 2023 decision and restore Mogopa to the position it occupied before the disputed intervention.

He further wants the court to prevent those relying on the ministerial decision from exercising control over the company.

Lease dispute dates back to 2019

Mr More traces the dispute to Mogopa’s efforts to secure a mining lease for an area at Thaba-Kholo in Butha-Buthe.

He says Mogopa Mining was established in 2015 and subsequently applied for the lease, with the Mining Board recommending its approval following its September 2018 sitting.

According to Mr More, the application had passed the necessary scrutiny, leaving formal endorsement of the lease as the outstanding issue.

He says negotiations subsequently took a different direction when then Mining Minister, Keketso Sello, insisted that Mogopa bring in “a local” partner.

Mr More alleges that Mr Sello insisted on the involvement of Lehlohonolo Nthontho, who at the time did not have a company capable of partnering with Mogopa.

Mr Nthontho subsequently established Batlokoa Minerals, which was incorporated in May 2019.

Mr More alleges that Mr Sello made it clear that the mining lease would not be signed unless Batlokoa became involved in Mogopa.

He characterises the negotiations as a “give and take” arrangement, alleging that Mogopa was effectively compelled to accept the proposed ownership structure in order to secure its mining lease.

The lease was eventually signed on 4 June 2019.

Battle over shares

Mr More says Mogopa later issued shares to prospective investors as it sought capital to finance its mining operations.

According to the affidavit, the company had authorised share capital of 1000 shares, with 600 made available for acquisition by potential partners or investors.

Batlokoa allegedly acquired a 51 percent interest in Mogopa on 10 January 2023.

Mr More says the Mining Board was aware of the transaction but subsequently informed Mogopa that the transfer did not comply with statutory requirements and directed that the position be corrected.

It is this position that Mr More says was subsequently overturned by Mr Moleko.

Moleko’s intervention

On 1 November 2023, Mr Moleko communicated a decision concerning Mogopa’s ownership and shareholding structure.

The minister referred to the “regularization” and transfer of shares in Mogopa and purported to act under section 43 of the Mines and Minerals Act 2005.

Mr More alleges that the minister retrospectively approved the disputed share transfer and directed that Mogopa’s share register be amended to include the government.

It was following this decision, he says, that Mr Moleko appointed Messrs Kobeli and Sephehi as government representatives on Mogopa’s board.

Mr More argues that the minister had no power to retrospectively approve a transaction which had already been found by the Mining Board not to comply with statutory requirements.

He further contends that the minister effectively imposed a new corporate structure on Mogopa without following the procedures prescribed by company law.

‘Hijacking’ allegations

The founding shareholder describes Mr Moleko’s decision as a “direct hijacking of a corporate entity” and a hostile takeover allegedly carried out through the government intervention.

Mr More alleges that the appointment of Messrs Kobeli and Sephehi formed part of that process.

He further alleges that the two men were “unqualified” for the positions and describes them as businessmen with political ties to the ruling RFP.

“I submit that the appointment of Mr Sekese Sephehi and Mr Teboho Kobeli, known businessmen with political ties to the ruling party was done in furtherance of corporate hijacking with the help of the government executive (Minister),” Mr More says in his affidavit.

He argues that Mr Kobeli’s position on the board flows directly from the disputed ministerial decision and should therefore fall if the decision is set aside.

“I aver that what the Minister did was not only a violation of the law but was a direct hijacking of a corporate entity, a hostile take-over of a company at the instance of the executive arm of government, abusing its power to allow control over a corporate entity,” he says.

Mr More further argues that the minister had no authority to retrospectively approve or consent to a transaction that had already contravened the law.

“I aver that the Minister is not empowered to give a retrospective approval or grant of consent when in the first place, the transaction preceding the Ministerial consent was unlawful to the extent that it violated the clear prescripts of the law,” he says.

Govt’s 20% stake challenged

Mr More also challenges the manner in which the government was introduced as a 20 percent shareholder in Mogopa.

He alleges that the minister imposed the government’s stake without following the required corporate procedures, effectively allowing the executive to acquire an interest in a private company.

“I aver that the Minister wanted to achieve direct control in the applicant’s affairs and had placed Batlokoa as its alter ego,” Mr More says.

He argues that the resulting directorship was similarly imposed unlawfully.

“The anomaly is that the directorship has been super-imposed by the Minister who acted ultra-vires his powers,” he says.

According to Mr More, the Mining Board had already made its position clear on the disputed transaction, but the minister disregarded that position when he proceeded to regularise the share transfers.

Mining operations ‘paralysed’

The dispute, according to Mr More, has gone beyond a fight over corporate control and is now affecting Mogopa’s ability to conduct its mining business.

He says the company has been unable to properly operate or fulfil its obligations under the mining lease because of the continuing battle over its ownership and governance.

“The court will realise that the applicant (Mogopa) is unable to function commercially because of the decision of the Minister,” he says.

Mr More says Mogopa has been involved in litigation since November 2023 in an attempt to undo the ministerial decision.

“The applicant has been involved in litigation from November 2023 seeking to undo or challenge the decision of the Minister,” he says.

He further alleges that efforts to restore the company to normal commercial operations have been frustrated by the disputed decision.

“The efforts of the applicant to return to normalcy and legality have been hindered by the decision of the Minister with practical and external effects continuing to block every move to lawfully and formally review and set aside the said decision,” he says.

Mr More warns that the continuing dispute could ultimately result in Mogopa losing its mining lease or leaving the concession unused for the remainder of its 10-year validity period.

What founders want

Messrs More and Ramoea are asking the High Court to review and set aside Mr Moleko’s 1 November 2023 decision and declare it irregular, illegal, unlawful and void.

They also wants the court to invalidate the minister’s retrospective regularisation of the transfer or acquisition of shares in favour of Batlokoa Minerals and other shareholders.

The applicants are further seeking interim orders preventing the respondents from holding themselves out as shareholders, directors, officers or authorised representatives of Mogopa pending the final determination of the case.

They want the respondents restrained from exercising control over Mogopa’s property, mining area and operations at Thaba-Kholo.

Ultimately, they want the court to declare that Mogopa is entitled to manage its affairs under the Companies Act, applicable mining legislation and its corporate instruments, rather than through ministerial directives.

The application also asks the court to find that the minister’s conduct constituted an abuse of power and was inconsistent with constitutional protections relating to property rights, free trade and fair competition.

The respondents have not yet filed their answering papers.

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