LONDON (Alliance News) - Central Rand Gold Ltd said Tuesday it has engaged legal advisors to defend against an application made by Puno Gold Investment Pty Ltd to wind up Central Rand's principal operating subsidiary Central Rand Gold South Africa.
Central Rand said, given the recent finding of the High Court of South Africa to uphold its appeal with costs in relation to its ongoing dispute with Puno, it believes this to be the latest strategy from Puno to "frustrate the operations of the company".
The dispute between the two companies dates back to 2007 in relation to the allocation of intercompany loans to fund a budget and work programme carried out by Central Rand Gold South Africa.
In 2009, Central Rand Gold Netherlands Antilles, the direct holding company of Central Rand Gold South Africa, exercised a call option giving Puno 90 days notice to acquire its entire interest in Central Rand Gold South Africa.
Puno then applied to the South Gauteng Division of the South African High Court to prevent this from proceeding, Central Rand Gold said. The parties agreed the matter would proceed to arbitration, but Puno failed to bring the matter before the Arbitration Foundation of South Africa.
Central Rand said on Tuesday it considers this new application by Puno "to be without merit", adding that it has engaged legal advisors to defend the action.
Shares in Central Rand were down 13% at 3.25 pence on Tuesday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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