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Govt appeals Hwange ruling

by Staff reporter
28 Mar 2020 at 08:06hrs | Views
LONG-DRAWN-OUT boardroom wrangles at Hwange Colliery Company Limited have taken yet another twist after the government lodged an appeal at the Supreme Court challenging a High Court ruling quashing its decision to place the ailing coalminer under administration.

Justice minister Ziyambi Ziyambi placed Hwange under administration in October 2018, but the High Court ruled him offside when he subsequently applied for confirmation of his decision.

Following the High Court ruling, the former Hwange board of directors, headed by Juliana Muskwe — which was rendered dysfunctional by Ziyambi's directive — initiated moves to elbow the coal miner's administrator, Bekithemba Moyo, as they prepared to take over.

The appeal has, for the time being, tilted the scales in favour of the government, the largest shareholder in Hwange, as it now means High Court judge Justice David Mangota's ruling is set aside until the Supreme Court's determination.

Ziyambi confirmed the latest development in an interview on Wednesday, saying he hoped for favorauble judgment at the Supreme Court.

"We made an appeal against the High Court's ruling last week and we are confident that the ruling will be in our favour because we highlighted in greater detail how the High Court erred in arriving at the judgment. The Attorney-General lodged the appeal. You can check it at the Supreme Court," Ziyambi said.

Efforts to get a copy of the appeal were futile because the Supreme Court, located in central Harare, was closed on Monday in the wake of the outbreak of the Covid-19 pandemic.

Attorney-General Prince Machaya could not be reached for comment.

The board's lawyers said they were waiting for the appeal to be finalised.

"An appeal was lodged and we are awaiting developments that side," lead attorney Charles Chinyama said.

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, said the appeal was only meant to buy time.

"The appeal is only being made in order to play for time. Otherwise, the company should be returned to the shareholders," he said in responses e-mailed from his London base.

In an interview with the Zimbabwe Independent last month, Ziyambi said the government was basing its appeal on the understanding that the High Court had erred in deciding to quash his move to place Hwange under administration.

"First the court erred in concluding that my failure to attach to my founding affidavit in the written report from the Minister of Mines, which l considered at the time when I placed Hwange under reconstruction, was fatal, yet section 8 (2) (b) of the Reconstruction Act does not require the placement before the court of the exact evidence I considered in imposing the reconstruction order but, rather, merely a statement of the reasons why I placed it under reconstruction," he argued.

"Also, the court erred in concluding that the reconstruction order was premised on nothing, and that, therefore, the application was premised on nothing. However, the evidence before the court showed that Hwange, a state-indebted company of monumental importance to the nation, was in the financial doldrums, was unable to pay its debts and could be restored to its status as a going concern if placed under reconstruction."

Ziyambi further said: "Also, the court erred in recognising that there was a scheme of arrangement in place when the scheme, not having been registered with the Registrar of Companies as prescribed in terms of section 191(3) of the Companies Act, had not come into effect. The court also erred in finding that my failure to first apply for the setting aside of the court order granted by the High Court under HC5012/16 relating to the sanctioning of the scheme of arrangement in respect of Hwange, before placing it under a reconstruction order, was fatal to my application for confirmation when an order sanctioning the scheme of arrangement need not first be set aside in order for the court-sanctioned scheme of arrangement to cease to be operational.

"Finally, the court erred in finding that the reconstruction order violated the provisions of section 2 of the Act, when those provisions relate to a scenario where the need for the reconstruction order arises within 30 days of the making of the application for the sanctioning of the scheme of arrangement, whereas on the facts before the court aquo, the need to place Hwange under reconstruction arose well after the company had been placed under reconstruction," he said.

Source - the independent

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