Fight for Gwanda mine escalates amid bribery allegations

The ongoing dispute over Vubachikwe Gold Mine has escalated, with major shareholder Forbes & Thompson accusing lawyers representing Fawcett Security Operations  -  a creditor seeking to place the mine under corporate rescue  -  of offering bribes to workers in an attempt to secure support for their application. This move is seen as part of an alleged plot to facilitate a hostile takeover by Kavango Resources, a London Stock Exchange-listed company.

In a letter to the Law Society of Zimbabwe (LSZ), Forbes & Thompson claims that the law firm Masamvu Da-Silva Gustavo Law Chambers, which is representing Fawcett, acted unethically by offering incentives to mine employees to support the corporate rescue application. The law firm, however, has strongly denied the allegations and threatened legal action against Forbes & Thompson.

Fawcett Security Operations filed an application on April 25 to put Vubachikwe under corporate rescue, citing Section 124 (1) of the Insolvency Act. The company argued that the mine was "heading towards insolvency" and owed over US$10 million to various creditors, including workers, the Zimbabwe Revenue Authority (ZIMRA), and ZESA Holdings. However, Allan Dolan, managing director of Vubachikwe and a majority shareholder in Forbes & Thompson, dismissed the application as "mala fide," accusing Fawcett of refusing to accept a payment of US$181,067.50 to further its alleged complicity in the hostile takeover plot.

The conflict took a dramatic turn when Forbes & Thompson lodged a formal complaint with the LSZ on August 29, following an earlier notice of complaint on July 17. In their letter, Forbes & Thompson's director, David Easterbrook, accused Masamvu Da-Silva Gustavo Law Chambers of unethical behavior during their visit to Vubachikwe on June 28.

"Legal practitioners from the said law firm offered bribes and incentives, including mealie-meal, to our staff members in exchange for their support of Fawcett's corporate rescue application," Easterbrook stated in the letter. "This conduct undermines the integrity of the legal profession."

Forbes & Thompson also alleged that the law firm had threatened workers who refused to cooperate with the corporate rescue efforts, and distributed fliers portraying itself as a "saviour" of the mine's workers. Affidavits from some mine employees corroborated these claims, stating that they were coerced into signing affidavits in exchange for food and other incentives.

Masamvu Da-Silva Gustavo Law Chambers vehemently denied the accusations in a formal response dated August 7. "It is denied that any threats were made or bribes were offered. Our legal practitioners were simply serving the necessary notice under the Insolvency Act," the law firm stated. "We will not be intimidated by baseless allegations."

The firm further warned Forbes & Thompson of potential legal consequences, stating that should the complaint prove unfounded, they would sue for punitive costs.

The case is being closely watched, with implications for the future of Vubachikwe Mine, which has been embroiled in a complex battle involving creditors, workers, and rival companies. It remains to be seen how the Law Society of Zimbabwe will respond to the complaints and counterclaims, as the fight for control of the gold mine intensifies.