LABAT AFRICA LIMITED

Incorporated in the Republic of South Africa

(Registration number 1986/001616/06)

JSE code: LAB ISIN:ZAE000018354

("Labat" or "the company")

REPORTABLE IRREGULARITIES

Shareholders are advised that, during the period when Aurora appointed directors were in charge of the company, two irregularities were discovered and reported to the company auditors, which were subsequently identified as reportable irregularities.

Following the Company`s reply, the auditors have confirmed to IRBA that the reportable irregularities are no longer taking place and whilst there is no certainty, the directors of the Company have taken adequate steps for the prevention or recovery of any loss as a result thereof.  

The first of these related to cheques to the value of R9 million signed by unauthorized signatories of the company for the payment of Aurora debt. These cheques were stopped at the bank. The company successfully defended this claim, have consulted with attorneys and is of the opinion that there is no liability in respect of this Aurora debt.    

The second matter relates to a $2 million investment which an investor had been led to believe was to be invested in Labat but which was "diverted" to an Aurora account. These funds were never received by Labat and the Company`s attorneys and directors are of the opinion that there is no obligation or liability on behalf of Labat. The directors are informed that the investor is pursuing the matter against the third parties.  

Both of these "irregularities" occurred during the tenure of Aurora appointed directors in Labat. These directors have been replaced, the board reconstituted and these matters have been reported to IRBA, the JSE and other relevant authorities for appropriate action.  

The directors are accordingly of the view that there is no financial liability which needs to be raised in the books of Labat in relation to these matters.

Statement issued by Labat Africa Limited through the JSE SENS service, August 11 2011

Click here to sign up to receive our free daily headline email newsletter