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EFORA ENERGY LIMITED - Litigation Update

Release Date: 05/04/2019 10:00
Code(s): EEL     PDF:  
Wrap Text
Litigation Update

EFORA ENERGY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE Share Code: EEL
ISIN: ZAE000248258
(“Efora” or “the Company”)

LITIGATION UPDATE

Shareholders are referred to the litigation update contained in the interim results released by
Efora on SENS on 26 November 2018 which stated that the Company’s court cases against
Robin Vela and Transnational Corporation of Nigeria and the Encha Group Limited
arbitration were due to be heard during March 2019. An update on these matters is provided
below.

Robin Vela

As contained in previous announcements, Efora claimed unpaid pay as you earn (PAYE) tax
from Robin Vela in the High Court who counterclaimed in the same action for (1) an alleged
share option scheme entitlement (R16 881 459.30, later reduced to R6 795 711.12), (2)
leave pay (R280 749.15, later reduced to R172 786.80), and (3) annual bonus
(R2 784 948.23). The High Court upheld Efora’s PAYE claim and dismissed the
counterclaims, save for the annual bonus claim, which was granted in Robin Vela’s
favour. Robin Vela appealed the grant of Efora’s claim and the dismissal of his two
counterclaims to the Supreme Court of Appeal (SCA). Efora cross-appealed against the
annual bonus grant.

The Company is pleased to announce that the SCA in a written judgment issued on 29
March 2019 dismissed Mr Vela’s appeals, but allowed his appeal in respect of the leave pay
claim in part. It granted Efora’s cross-appeal, with costs and interest. The SCA ordered
Robin Vela to pay Efora:

   •   R3 324 524.36 with respect to pay PAYE taxes;
   •   Interest on the above amount at the prescribed mora rate from 26 March 2014 to date of
       payment;
   •   Efora’s legal costs (to be determined in due course, but estimated to be in the region of at
       least R300 000).

The SCA has ordered the Company to pay Robin Vela R103 661.28 as leave
pay. Practically speaking, this amount falls to be deducted from the amounts the SCA
ordered Robin Vela to pay Efora. Robin Vela has until the end of April 2019 to pay the
ordered amounts to Efora.

Transnational Corporation of Nigeria (Transcorp)

The Transcorp Appeals no.s:
   •   CA/L/1101/2016 – Appeal against decision of the High Court refusing the appointment of
       arbitrators; and
   •   CA/L/1102/2016 – Appeal against the decision of the High Court refusing to stay proceedings
       pending arbitration

were on the Appeal Court role for hearing on 26 March 2019. Our legal counsel appeared at
the Court of Appeal on which date counsel was informed by the Head of Department (HoD)
of the Court of Appeal that the Presiding Justice instructed the HoD to adjourn the appeals to
16 March 2020. The rationale is the disproportionate number of appeals relative to the
available Appeal Court Judges and that the Appeal Court in Nigeria is unable to cope with
the volume of appeals.

Our Nigerian counsel has been instructed to petition the Chief Justice to seek an
abridgement of the 16 March 2020 hearing date and seek an earlier date.

Encha Group Limited

Arbitration commenced on 26 March 2019 and has been completed. We await judgement
on the matter and this is expected before the end of June 2019. As previously announced,
the Company is seeking to recover R115 million from Encha Group Limited.

Commenting on these developments, Damain Matroos, Chief Executive Officer (Interim) of
Efora, commented “The resolution of legacy issues has been one of our top priorities. We
are pleased to have closure on our longest outstanding legacy issue and the result supports
our perseverance to recover funds on behalf of Efora’s shareholders. We are however
disappointed that our continued efforts in Nigeria regarding our claim against Transcorp
have not yet come to fruition due to circumstances beyond our control. We remain steadfast
in our legal position and confident that we will close out the Transcorp matter in the near
term.”

Johannesburg
5 April 2019

Sponsor
PSG Capital

For further information please contact:

Efora Energy Limited
Tariro Gadzikwa
+27 (0)10 591 2260

Buchanan (Financial PR adviser)
Ben Romney / Chris Judd
+44 (0)20 7466 5000

About Efora
Efora Energy Limited is a South African based independent African oil and gas company,
listed on the JSE. The Company has a diverse portfolio of assets spanning production in
Egypt; exploration and appraisal in the Democratic Republic of Congo; midstream project
relating to crude trading in Nigeria and material downstream distribution operations throughout
Southern Africa. Our focus as a Group is on delivering energy for the African continent by
using Africa’s own resources to meet the significant growth in demand expected over the next
decade.

Date: 05/04/2019 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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