- February 19, 2021
- Posted in NEWS
Redwing Mine workers have lost confidence in their corporate rescue practitioner, Dr Cecil Madondo, who is facing criminal charges, and want him immediately replaced.
Metallon Corporation-owned Redwing, was placed under Dr Madondo’s control in July last year after an application by the workers.
Secretary general of Zimbabwe Diamond and Allied Minerals Union secretary general Justice Chinhema, said in an interview that the process of looking another corporate rescue practitioner was underway.
“What we have agreed on is that we need to look for another corporate rescue practitioner who can safeguard the interest of the workers and the company,” said Chinhema.
“Our lawyer was at the office of Master of the High Court looking at the list of rescue practitioners so that we can do our selection. That will probably happen on Monday.”
Chinhema said at the time, the company was placed under corporate rescue management, it had 800 workers owed about US$14 million backdated to 2012.
“We want all the money outstanding paid in full while the security of our workers is safeguarded,” said Chinhema.
Redwing Mine is located in Manicaland province in the east of Zimbabwe, about 20 kilometres northeast of the city of Mutare and 265 kilometres southeast of Harare. It used to be one of the largest gold producers in country.
Its parent company, Metallon used to be the largest producer of gold in the country. Apart from Redwing, it owns How Mine near Bulawayo. Shamva Mine was sold to Kuvimba Mining House, jointly owned by the Government and a private investor.
About corporate rescue
The Insolvency Act (Chapter 6:07), in line with international norms and standards prescribes two gateways to entry into corporate rescue and supervision namely voluntary procedure and compulsory produce.
In terms of S122 a company can resolve to voluntarily commence corporate rescue while in terms of S124 an affected person may apply to court for an order placing a company under supervision and corporate rescue.
Voluntary corporate rescue proceedings are launched by the company passing a resolution to begin corporate rescue proceeding and place the company under supervision. The voluntary gateway seems to be the most important and progressive of the two as it is launched by the board, which has all the information at its disposal to timeously act at the onset of financial distress as success of corporate rescue largely depends on early interventions secondly, the voluntary route is cheaper as it requires no court process and the associated pitfalls of protracted legal battles.