Hwange Colliery back to owners
Prolonged boardroom wrangles at Hwange Colliery Company (Hwange) took a fresh twist this week after it emerged the company will now be returned to its shareholders while former board members have bounced back following last week’s High Court ruling quashing the government’s decision to place the ailing coalminer on administration the Independent reported.
This came after Justice minister Ziyambi Ziyambi applied for High Court confirmation of his October 2018 reconstruction order issued in terms of the Reconstruction of State Indebted Insolvent Companies Act.
However, the Juliana Muskwe-chaired board which had ceased to exist by operation of law soon after the issuing of the order — contested the decision along with other shareholders, trustees, and creditors, arguing that Ziyambi had abused his powers.
High Court judge Justice David Mangota ruled that the order had clearly violated the concerned piece of legislation and was therefore null and void.
Board members argued that the reconstruction order was a ploy by Mines Minister Winston Chitando to remove them after they had initiated a forensic audit into the company.
Interestingly, the subsequent audit, by Ralph Bomment Greenacre and Reynolds, subsequently found that Chitando had allegedly orchestrated shady business dealings and presided over the misuse of a US$115,5 million loan at the troubled coal-mining giant during the time he served as board chair.
The audit says Chitando, in cahoots with senior executives, systematically manipulated and creamed off the company between 2016 and 2017. Lawyers representing Muskwe and her board yesterday, Chinyama Attorneys, wrote to Hwange administrator Bekithemba Moyo and his assistants Mutsa Mollie Jean Remba, managing partner of Dube, Manikai & Hwacha law firm, and Munashe Shava, a chief operating officer and project leader at Great Dyke Investments, advising them to immediately vacate office and pave way for the returning board.
“We act on behalf of the Juliana Muskwe board of directors, the board in place immediately before the reconstruction order of October 26, 2018, was issued. You may now be aware that the High Court of Zimbabwe dismissed the confirmation of the reconstruction order by the minister of Justice. The effect of the said judgment was to set aside the reconstruction order,” the letter reads.
“In the result, we kindly request you and your assistant administrators to immediately cease presiding over the affairs of Hwange Colliery Company. Such affairs now fall under the jurisdiction of the board of directors following the dismissal of the application for confirmation of the reconstruction order which appointed you. We advise that any transactions by you or any of your assistant administrators post the judgement of the High Court of Zimbabwe shall be illegal. Should you not vacate the office, you shall be in contempt of court,” the Muskwe board’s attorneys said.
“Yes, we have seen it (the letter), but do not worry about it. We will take guidance from the government. If the government decides to appeal, then the judgement will be suspended until after the appeal process. However, if the government does not appeal, then the company will be handed over to shareholders,” he said.
Key shareholder, British tycoon Nicholas Van Hoogstraten — who holds a 27% stake in the firm and had also challenged the administration order through his lawyer Thabani Mpofu — welcomed the decision, but remains wary of government domination.
Government, with 37%, is the biggest shareholder in the company.“Firstly, in order to play for time, the minister may appeal. Otherwise, yes, the company should be returned to the shareholders — therein lies the problem because the major shareholder, with 37%, is the government,” he said in responses e-mailed from his London base.
“As you well know, the only reason for the destruction of Hwange has been the long series of corrupt and incompetent directors and management appointed by government. It had been my hope, and expectation, that the new administration would deal correctly with these historic issues but, so far, there has been no sign of this.”
Chitando was evasive when contacted for comment. After repeated calls on his mobile phone went unanswered, the Zimbabwe Independent sent questions to him on WhatsApp, to which he only promised to respond, but never did.
“(I) will revert (back to you). Just seeing your message now,” he wrote back to the Independent on Tuesday night but did not do so. Subsequent calls were also ignored.
Ziyambi was also not answering calls.
Source: The Independent