South Africa's Association of Mineworkers and Construction Union, or AMCU, accused Samancor Chrome Ltd. of fraud, and sought permission from the Johannesburg High Court to sue the company and its current and former directors, Bloomberg reported Oct. 2, citing Alternative Information & Development Centre, or AIDC, a group assisting the case.
AMCU represents beneficiaries of the Ndizani Workers' Trust, an employee ownership plan which indirectly has a 5.6% stake in the company.
AMCU claimed the company moved US$125 million to the bank account of a firm based in the British Virgin Islands in 2007 allegedly for the benefit of directors, to whom it was paying "excessive" management fees and sales commissions.
The union is also seeking an order that Samancor account for the true value of these transactions, according to AIDC.
If permission is granted to proceed with the case, AMCU plans to pursue the appointment of independent directors and compensate people who were negatively impacted by the transactions.
The loss to workers, who are also members of the trust, is estimated at US$100 million by Richard Spoor, who is an attorney for the applicants.
Samancor did not immediately respond to queries regarding the scenario.
