Zuma's nephew to pay $1.65 million to South Africa mine liquidators: union

September 7, 2016 7:44 AM EDT

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JOHANNESBURG (Reuters) - A nephew of South African President Jacob Zuma will pay 23 million rand ($1.65 million) to the liquidators of a gold mining company after a court last year ruled he and other directors stripped the company of assets, leaving thousands of workers jobless and destitute.

Khulubuse Zuma and a grandson of South Africa's anti-apartheid hero Nelson Mandela were found by a judge to have acted in a reckless and fraudulent manner when they stripped the assets of two mines operated by their company Aurora.

Judge Eberhard Bertelsmann ordered the directors and associates involved in Aurora Empowerment Systems to pay shareholders and liquidators 1.7 billion rand ($121 million)compensation for their role in the demise of the operations.

Trade union Solidarity said on Wednesday that Khulubuse Zuma agreed to pay 23 million rand in damages in the High Court in Pretoria in a deal that was struck last week.

"He came forward and said I can only pay 23 million rand ... But if it is found he has the means to pay more, he could be liable for more," Solidarity General Secretary Gideon du Plessis told Reuters.

He said that after 5 million rand is paid for the legal fees of the liquidators, most of the balance will go to the miners. Solidarity has been a party to the proceedings because it has been representing 180 of its members.

"Zuma has already made the first payment of 5 million rand and he has to pay a further 500,000 rand by the end of the day," Solidarity said in a statement. Zuma will subsequently make monthly payments until the full 23 million rand is paid.

Aurora was appointed in 2009 to manage two gold mines near Johannesburg after the Pamodzi Gold company which ran them went into liquidation.

But it did not have the capital to keep the mines running and the operations ground to a halt, with assets removed.

Aurora's acquisition of the mines was held up in the media as an example of how well-connected members of the political elite get preferential treatment in Africa's most industrialized economy, especially under Zuma's presidency.

Mandela's grandson Zondwa Mandela, another former Aurora director and other people involved with the company will face sequestration proceedings at a later date, where their assets could be taken and sold, Solidarity said.

Lawyers representing Zuma and Mandela could not immediately be reached for comment.

($1 = 14.0100 rand)

(Reporting by Ed Stoddard; Editing by Elaine Hardcastle)



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