Feud hots up at Lonrho
Sunday 10 December 1995
Mr Rowland is also threatening renewed legal action relating to a disputed option Mr Bock holds to buy his 6.3 per cent stake in Lonrho, which became exercisable yesterday.
The tycoon, ousted earlier this year, says he has already written to the Director of Public Prosecutions, alleging conspiracy to pervert the course of justice in evidence that Mr Bock presented in court in May to prevent annulment of the option.
"The papers have gone to the DPP and we are working on a writ here against Mr Bock," Mr Rowland said. Mr Bock has always denied Mr Rowland's allegations.
Lonrho shareholders approved the merger of its pounds 430m platinum division with Impala 10 days ago, in a deal that creates the world's biggest platinum producer. The merger is also key to Mr Bock's attempts to lift shareholder value, in a series of moves that may see further spin-offs of Lonrho's hotels, motor dealerships and African food interests.
Last Wednesday, the Bafokeng tribe of Bophuthatswana issued a writ against Impala, seeking to annul mining rights granted back in 1990, threatening the value of the merged Implats group in which Lonrho now has a 32 per cent stake.
The long-awaited action is based on claims that Lucas Mangope, the since discredited former president of the former self-governing area, had no authority to sign the deal with Impala.
"If the challenge is successful, Impala will have no rights to mine tribal land," Bafokeng's law firm of Bell, Dewar and Hall said in a statement.
Like Impala, Lonrho says it is confident the action will fail.
At the shareholder meeting, however, Mr Rowland accused the Lonrho board of glossing over the threat posed by the Bafokeng's case to the value of Impala's platinum interests. In its merger circular, Lonrho said any litigation by the Bafokeng tribe would fail "in all probability", though it declined to elaborate.
Its verdict is based on a 400-page legal opinion, produced by counsel in Johannesburg and London. But sources familiar with the opinion's content say that while it favours Impala's position, it also warns that the Bafokeng have a credible claim. Onlookers also fear an element of risk, given South Africa's new multi-racial government and the Bafokeng's political clout.
Lonrho has, however, negotiated an option to sell its Implats shares to Impala's parent Gencor - but only at a maximum pounds 380m - if the action succeeds.
"Lonrho has fully protected itself against the eventuality of such litigation," a spokesman said, downplaying the Bafokeng writ. But Johannesburg-based mining analyst Mark Roggen- singer of brokers Merrill Lynch is less sanguine. "The case is a difficult one to call," he said, adding that renegotiation of the Impala rights may be a likely outcome.
The platinum merger provoked bitter boardroom splits at Lonrho, with director Terence Wilkinson, who heads Lonrho's South African mining businesses, opposed from the start. Chairman Sir John Leahy refused to let Mr Wilkinson answer questions at the shareholders' meeting.
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