Business Day, 23 October 2002, CEF Subsidiary to Come Under Hammer, 

By Carli Lourens

CONTROVERSIAL Central Energy Fund (CEF) subsidiary Enerkom will be auctioned next week following the company's failure to commercialise the immune system booster that formed the basis of its activities.

The company has guzzled about R100m of taxpayers' money to date, mainly in its attempts to commercialise the coal-based anti-HIV/AIDS immune system booster, Oximate.

Enerkom came under the spotlight last year when it emerged that its Oximate drug was being tested on Tanzanian soldiers.

However, the CEF has now admitted Enerkom's failure and the CEF board has decided to sell it.

The decision was based on the latest research on Oximate, which did not augur well for the longterm viability of the project, acting CEF chairman Coen Kruger said yesterday. He explained that Enerkom was established in line with the fund's mandate, which includes the initiation of research and development projects in the field of energy, and to commercialise these technologies if possible.

Enerkom focused on the production and commercialisation of high-value coal-derived products by using its patented oxidative coal conversion technology.

However, the board decided that it could not continue funding the project, because commercialisation, if possible, was not a possibility in the short term.

Auctioneer Aucor will attempt to sell the company as a going concern and expects interest from the agricultural and pharmaceutical sector. There will be no reserve price on the assets.

These will include Enerkom's pharmaceutical and agricultural pilot and processing plant, including intellectual capital, a state-of-the-art laboratory, registered and unregistered patents and a mechanical workshop including vehicles and forklifts, as well as the R100m tax loss.

It has been said that research on the AIDS drug has been badly recorded. But potential buyers may also be interested in a handful of the company's other activities, such as agriculture products also derived from coal-based substances and which were successfully commercialised.

Kruger said the decision to dispose of the company was not in any way influenced by the Tanzanian incident, for which Enerkom received much criticism.

"It was purely a commercial decision," said Kruger.