Barry Sergeant: Investigations editor, Moneyweb

Posted: Tue, 25 Apr 2006 17:00 | © Moneyweb Holdings Limited, 1997-2006

MONEYWEB: Barry Sergeant is up now – about Brett Kebble. Our theme song for tonight is called
Wild Wild Life and, I guess, if there was to be an epitaph for Brett Kebble, this could be very close
to it.

BARRY SERGEANT: Very much so, Alec. I mean, the last few years of Brett Kebble’s life, we saw
him flying around, not in a single jet, but two, he had a GulfStream II and also a Learjet. And that
was nothing compared to other interests that he had. He used to trade Ferraris – he didn’t drive
them, he used to trade them. He had up to 10 at any given time, he had Bentleys, he had all sorts
of motor vehicles, art works, some of the best South African names, priceless timepieces and so
on – the list continues.

MONEYWEB: So he lived as a billionaire, almost like an Arab oil sheik. Yet today his estate, what
he left behind, was shown to be hopelessly insolvent.

BARRY SERGEANT: Yes, indeed. If you look at the court papers that have gone in to the High
Court, the application is from Randgold & Exploration, which is one of the companies where he
was chief executive until August 31 last year, the other two of course JCI and Western Areas.
Randgold and Exploration – let’s call them R&E – they’ve put in a summation of his estate, which
at the moment is handled by an executor. According to the executor, the realisable assets in the
estate will fetch about R70m. The liabilities, SARS, the tax authorities, R186m. And then R&E, plus
JCI, around about R300m and other creditors R30m. And that’s a lot of figures. But the bottom line
in round figures is that he is hopelessly insolvent to the tune of R450m. He died a pauper.

MONEYWEB: How is this possible? He was able to drive Ferraris, he was able to fly in
GulfStreams. When Brett Kebble walked into the studio, he certainly didn’t have tattered clothes on
– he always only wore the best.

BARRY SERGEANT: Oh yes. And certainly some of his associates in business and on the political
scene were known to also enjoy a fairly flamboyant lifestyle – certain brands of cigars,
champagnes, cars, timepieces and so on. Alec, I think we’ve just got to back-wind a little bit, go
back to, let’s say, around the beginning of 2002. By that stage, Kebble was in control, he was the
chief executive of JCI, R&E and Western Areas. And just to back-cast a little bit further, because
it’s a very interesting fact from history, in the middle of July ’97, Brett Kebble engineered and pulled
off the hijacking of JCI from Mzi Khumalo’s African Mining Group. You might remember, that was
sold by Anglo American in November ’96. Now, without going through the details, because they are
incredibly complicated, the bottom line was that Brett Kebble effectively issued himself shares
worth R1.5bn. So, when he told some people – and he did tell a few – that he was a billionaire, it
was true; on paper it was true. That was the original JCI. He hijacked JCI from a BEE deal. By the
time we get to the beginning of 2002, he is desperately short of cash, right throughout the group,
right throughout his life.

MONEYWEB: Was this because the share price has fallen, or because he had just been
spending?

BARRY SERGEANT: Alec, the main draw on cash was Western Areas, which started putting
down the twin sub-vertical shaft at South Deep, west of Johannesburg, in 1995. Now that’s still
ongoing. It’s not 100% complete 10 years later. That drew cash day after day after day. And the
gold price, remember, back in 1999, 2000 it went into a complete trench. That’s when it hit around
about $250 and then it went sideways for months and months and months. So it was very difficult
for anyone in that industry to raise any kind of serious cash and, if you did, there was going to be a
big dilution of your shares. Go forward to the beginning of 2002, and that was when Brett Kebble
started pilfering, he started pillaging and looting. And his main target was Randgold Resources
shares – 18m of them which were held in R&E. Now Randgold Resources of course was listed in
London and on Nasdaq. It was founded here in Johannesburg in 1995.

MONEYWEB: A very successful company, as well. The share price did well. They hit a bonanza in
Morila Mine in Mali and, as a result of that, their share price shot up, and all of a sudden Kebble
had something that was of value. But then are you saying that he sold those shares to put the
money into Western Areas and maybe to support his lifestyle?

BARRY SERGEANT: Exactly. And what we know today so far, out of the forensic reports, is that,
just looking at R&E, from 2002 round about until October last year, he realised R1.8bn in cash from
selling mainly Randgold Resources shares.

MONEYWEB: And he wasn’t allowed to do that?

BARRY SERGEANT: No.

MONEYWEB: No shareholders said, “You can go ahead and do it, Brett”.

BARRY SERGEANT: Absolutely right. This was all misappropriated. Now that R1.8bn sounds like
an awful lot of money. But, bear in mind, he’s trying to protect his position ultimately in Western
Areas. His biggest personal shareholding is in JCI. So out of the R1.8bn, he pushed R1.1bn in to
JCI. Roughly R500m went back into R&E, and then R367m disappeared. That money has been
stolen. So let’s go up one step to JCI – R500m there today is missing.

MONEYWEB: So Kebble took R500m from shareholders of JCI – it’s almost a fact.

BARRY SERGEANT: Yes. If we break down the R500m, R266m went into worthless transactions,
benefiting so-called third parties.

MONEYWEB: But what you were saying earlier in our editorial meeting, Barry, is that, yes, the
story is big, that Kebble went bust for nearly half a billion rand, but the other story is that those who
benefited from the stolen goods are now going to be tracked down. How does that work?

BARRY SERGEANT: Yes, absolutely, Alec. If you look at this estate, it’s hopelessly insolvent to
the tune of roughly R450m. So why are on earth is R&E or JCI or anyone else going after this
estate? The reason is clear, it’s not made clear in the court papers by any means, but the reason is
to force this estate into a so-called Section 152 inquiry under the Insolvency Act. That sounds
terribly boring. It’s very similar to a 417 inquiry under the Companies Act.

MONEYWEB: Which sounds just as boring.

BARRY SERGEANT: What it does is it gives the forensic auditors, who have so far gone as far as
they can – they’ve been hitting stone walls when it comes to certain people in particular. You go
into these inquiries under the Insolvency Act. The presiding officer is very similar to a judicial officer
– they can summons individuals under pain of arrest if they don’t appear.

MONEYWEB: So they can now get to the bottom of the whole matter, only by using Kebble’s
estate. That’s interesting. Because ordinarily, if I die and I’m R5m liabilities exceeding assets, no
one is really going to bother to sequestrate me because there’s nothing left there. But in this case
there’s an ulterior motive?

BARRY SERGEANT: Absolutely. I mean the court papers show that the in the R&E case
specifically, there’s R165m that Brett Kebble personally stole from R&E. Now these inquiries will
enable this presiding officer to interrogate people, and the court papers say that an analysis of
Brett Kebble’s bank account – can you imagine what that looks like? – shows numerous payments
to third parties.
MONEYWEB: What “third parties”?

BARRY SERGEANT: Third parties are not named in the court papers.

MONEYWEB: Are they people?

BARRY SERGEANT: Absolutely. These are going to be individuals – whether they are there to
win him political favour or business favour or whatever the case might be, bribes. You can only
suspect that when this money has been stolen – and by the way, it was stolen several times before
it ended up in Brett Kebble’s bank account, because he was laundering, there is a very complex
machine behind all of this – but individuals and entities were paid, and one of the main front
companies is called Tuscan Mood. But Brett Kebble’s own bank account shows, according to the
court papers, numerous payments to third parties. It’s those people that are going to be called into
these inquiries.

MONEYWEB: Not feeling very comfortable tonight, are those people? Barry, Judge Willem Heath
– he was supposedly an independent judge, he was in the studio a couple of times telling us that
there were certain political people who were above reproach and that there was a big conspiracy
against himself and Brett Kebble, etc. Might he be at the wrong end of the stick?

BARRY SERGEANT: I really can’t comment, it’s too early to tell. I think at the end of the day, if
you look at the position of lawyers, if you are a practicing attorney or advocate, you might end up
defending somebody who is seen by the public as a terrible criminal, someone who has done
something absolutely appalling. That attorney or advocate is going to turn around and say, look,
I’m only doing my job, this person has got rights. So I think we’ve still got to see the information
that comes out of these inquiries, which is going to be difficult by itself, because most of them are
held in camera behind closed doors. But there is so much interest in this that we are bound to see
a lot of pressure put on the truth coming out into the public domain.