Rockwell Diamonds Subsidiaries Face Liquidation

Johannesburg: Rockwell Diamonds said a judge in Kimberley, South Africa issued an interim liquidation order last Thursday against three of its subsidiaries, reports

It said the interim orders, which have to be confirmed in a final hearing, included Rockwell Resources RSA, HC van Wyk Diamonds and Saxendrift Mine Limited. The interim court order would not affect Rockwell Diamonds as the parent entity.

An interim liquidator would be appointed, taking control of the three companies, and would operate them in the best interest of creditors until the final hearing, currently scheduled for June 22, 2017.

It said the interim decision emanates from an action by Rockwell’s former contractor C-Rock Mining, which launched a liquidation application against the three subsidiaries.

C-Rock was said to have relied on an alleged service level agreement, a contract mining agreement that was found by forensic investigation to have been awarded to C-Rock under highly irregular circumstances, and for an alleged undertaking that Rockwell would reimburse them for certain tax penalties and accrued interest on such penalties.

It also relied on an alleged undertaking that Rockwell would pay certain debts of Saxendrift, and the construction cost of the wet plant at Wouterspan as well as a large number of disputed invoices stemming from alleged informal agreements with certain former company management. Rockwell’s three subsidiaries disputed the very existence, as well as quantum, of the C-Rock claims.