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Court halts RioZim's asset sales
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The High Court has granted an urgent interdict to the Zimbabwe Diamond & Allied Minerals Workers' Union (ZDAMWU), barring RioZim Limited from disposing of its mining assets while corporate rescue proceedings are pending.
In a ruling delivered by Justice Maxwell Dembure, the court underscored that once an application for corporate rescue is filed, "an immediate moratorium" on asset disposals takes effect to protect creditors and employees.
The case stems from RioZim's cautionary statement issued on July 21, 2025, signalling its intention to sell mining and non-core assets. This came after ZDAMWU filed an application on April 28 seeking to place the listed miner under supervision, citing financial distress.
Justice Dembure ruled that allowing disposals at this stage would render the rescue proceedings "academic" and frustrate the protection that the law affords to workers and creditors.
"If the applicant's rights are not preserved, the purpose of the ongoing litigation will be defeated, which is against the interests of all affected, including the workers," he said.
ZDAMWU's lawyer, R. Mabwe, stressed the urgency of the case, arguing that without swift intervention, "irreparable harm would result" to employees who depend on RioZim's assets for job security.
However, RioZim's legal team, led by E. Donzvambeva, countered that proposed disposals were vital to generate liquidity for the company's survival. The judge dismissed the argument, citing lack of clarity on which assets were to be sold.
The court issued two key orders: prohibiting any disposals contemplated in RioZim's cautionary statement and directing the company to pay legal costs.
"The balance of convenience strongly lies in favouring the applicant's request for an interim interdict to prevent potential asset dissipation until a determination is made on the main application," Justice Dembure ruled.
The decision means RioZim's restructuring efforts will now proceed under court oversight, with the outcome of the pending corporate rescue application expected to have major implications for the mining sector and employee security.
In a ruling delivered by Justice Maxwell Dembure, the court underscored that once an application for corporate rescue is filed, "an immediate moratorium" on asset disposals takes effect to protect creditors and employees.
The case stems from RioZim's cautionary statement issued on July 21, 2025, signalling its intention to sell mining and non-core assets. This came after ZDAMWU filed an application on April 28 seeking to place the listed miner under supervision, citing financial distress.
Justice Dembure ruled that allowing disposals at this stage would render the rescue proceedings "academic" and frustrate the protection that the law affords to workers and creditors.
"If the applicant's rights are not preserved, the purpose of the ongoing litigation will be defeated, which is against the interests of all affected, including the workers," he said.
However, RioZim's legal team, led by E. Donzvambeva, countered that proposed disposals were vital to generate liquidity for the company's survival. The judge dismissed the argument, citing lack of clarity on which assets were to be sold.
The court issued two key orders: prohibiting any disposals contemplated in RioZim's cautionary statement and directing the company to pay legal costs.
"The balance of convenience strongly lies in favouring the applicant's request for an interim interdict to prevent potential asset dissipation until a determination is made on the main application," Justice Dembure ruled.
The decision means RioZim's restructuring efforts will now proceed under court oversight, with the outcome of the pending corporate rescue application expected to have major implications for the mining sector and employee security.
Source - NewZimbabwe
