Distribution Rocks is suing Supermix for allegedly failing to pay in excess of R7 million it claims is owed.
A KIMBERLEY mining company has been linked to British businessman and Brexit “bad boy and bankroller” Arron Banks.
Papers filed in a civil action in the Northern Cape High Court allege that right-wing businessman Banks allegedly raised capital from Russian investors for diamond mines that he owns in Kimberley.
The court papers filed in the high court relate to a civil action between Banks’ diamond company, Distribution Rocks, and its former partner firm, Supermix. Distribution Rocks is suing Supermix for allegedly failing to pay in excess of R7 million it claims is owed.
An affidavit from Christopher Kimber, managing director of Supermix in Kimberley, states that during 2013 he was involved in a number of companies which owned amongst other assets diamond mining concerns in the Free State and Northern Cape.
“In July 2013 I was contacted telephonically by James Pryor, who advised that he represented a British owner of diamond properties in Lesotho who was interested in acquiring diamond properties in South Africa.
“We agreed to meet and in late August 2013 I travelled to Durban and met with James Pryor, Arron Banks and Kobus Coetsee at the Beverly Hills Hotel. Pryor introduced himself as Arron Banks’ ‘man in Africa’, Arron Banks as the potential investor and Kobus Coetsee as Arron Banks’ minder.”
Kimber states that discussions progressed to the point that Banks confirmed his interest in acquiring diamond assets and it was arranged for the three of them to undertake a site visit. This was undertaken in August 2013, where after the parties agreed to enter into a business relationship.
In terms of the agreement, Kimber was contracted by Banks’ company to manage the operations of the Newlands Diamond Mine, the Blaauwbosch Diamond Mines and the New Elands Mines near Kimberley.
In order to raise additional funding for Newlands Diamond Mine, Kimber approached Banks for assistance and it was agreed that he would sell for export to Banks a parcel of 2 000 carats of uncut diamonds to be mined at Newlands. Banks paid R3.7 million for the diamonds and in May 2015 a second identical transaction was requested by Kimber to facilitate further funds for the Newlands Diamond Mine.
According to a letter of demand from Distribution Rocks, Supermix failed to deliver the diamonds.
“Notwithstanding payment you failed to deliver or export the diamonds, representing to our client impossibility by reason of South African laws regulating the export of diamonds which allegedly frustrated the sale and export of parcels but undertook in the latter part of 2015 to refund to our client the purchase price of R7.4 million. Notwithstanding such an undertaking you have failed to effect such repayment.”
According to Kimber’s affidavit, however, during the latter part of 2014 further funding was required for the various businesses and Banks advised him that he had various funding options open to him, one of which was to create a financial instrument (a diamond bond) whereby 4 million and 5 million would be raised for the capitalisation of the business and the other through a loan from Southern Rock, an insurance company belonging to Banks.
Kimber added that throughout the early part of 2015 Banks kept promising the imminent arrival of these funds. “Construction of operation on the mine sites continued in expectation of the funds, however these funds were not forthcoming.
“It has recently become apparent that the funds were in fact raised but used by Arron Banks in other interests that he has including but not limited to his participation in the funding of Brexit,” he states in his affidavit.
Kimber adds that the failure of the diamond bonds to materialise, coupled with other issues led to the further deterioration of the relationship between him and Banks and “ultimately the two of us agreed to part ways”. In the settlement, Banks acquired the entire shareholding in New Rush.
Before this, however, Kimber states that Banks had been putting him under enormous pressure regarding the performance of the mines “for which he had unrealistic expectations”.
“Newlands had not produced the expected 4 000 carats. Banks had made commitments to those raising the Bonds funds and it appeared that other ‘investors’ or potential investors were demanding performance and/or sight of the yet to be mined production. I was finally made aware in October (2015) that in truth, Banks had been dealing with Russians who contemplated investing in the mines, locally as well as Lesotho.
“Banks, through the introduction of Pryor, had allegedly secured potential opportunities in Sierra Leone, Ghana, Botswana and Namibia. I was informed by Banks that he had travelled to Russia and discussed with them the diamonds opportunities as well as gold mining opportunities, in Russia. He further indicated that he would be meeting with the Russians again during November.”
An investigation by Britain’s Channel 4 News has cited the papers filed in the Northern Cape High Court, fingering Banks as having allegedly raised the capital from Russian investors for the diamond mines he owns in Kimberley and then re-routing the money to bankroll other projects, including the Leave.EU campaign.
The findings, according to Channel 4, have added a new spark to speculation of Russian involvement in the Brexit referendum.
The news agency pointed out that the documents were written and filed months before recent newspaper revelations of Banks’ multiple contacts and meetings with Russians.
An online publication in South Africa points out that Banks, who made the biggest ever financial donation in the history of British politics, is being investigated with regard to his Russian connections and the role this played in the result of Britain’s 2016 “Brexit” referendum.
Apart from the Kimberley mines, one of Banks’ closest associates, James Pryor, is South African-born and acted as an adviser to Margaret Thatcher and FW De Klerk.
“There has been ongoing speculation of possible Russian interference or manipulation in the Brexit vote. Banks has faced questions in the UK parliament with regard to the Leave.EU campaign,” the Daily Maverick states.