Lily mine appeal dismissed
Flaming Silver Trading 373's attempt to transfer shares in the Lily and Barbrook Mines, was denied in the Mpumalanga Division of the High Court.
MBOMBELA – Fred Arendse, the CEO of Flaming Silver, attempted to enforce a sales of shares agreement entered into between Flaming Silver and Vantage Goldfields SA (VGSA), in an appeal application to the full bench of the High Court. The appeal was dismissed with costs on August 6, in favour of VGSA.
An agreement was entered into between VGSA and Flaming Silver, which required financing to be procured on terms acceptable to VGSA before January 31, 2018, or the agreement would lapse and be of no effect. Various extensions were agreed upon, and a legal battle ensued to gain ownership of these mines after Flaming Silver could not honour the agreement.
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The sale agreement was declared null and void by Acting Judge Andre Roelofse on July 17, after he ruled that proper notice was not given to the board of directors of Flaming Silver to ratify the fourth addendum in order to extend the principal agreement entered into on November 1, 2017.
Flaming Silver and its CEO, Fred Arendse, contended that Roelofse had made a mistake. He judged the validity of the decision of the board of directors to ratify the signing of the fourth addendum on October 31, 2018, against criteria set out in Section 73 of the Companies Act, 2008.
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His legal representative argued that Roelofse had neglected to evaluate the resolution of the board on the papers before him, against the backdrop of the dispute advanced by the fifth respondent, Ferdi Dippenaar, a former board member of Flaming Silver, that he did not have adequate information to make a meaningful decision regarding the extension of the agreement.
Roelofse asserted that although round robin decisions are permitted in terms of Section 74 of the Companies Act, it does not dispose of the notice requirement in Section 73(4) of the Companies Act. Flaming Silver therefore did not prove on a balance of probabilities that the appeal had a reasonable prospect of success.
