THE legal battle involving Independent Power Tanzania Limited (IPTL) shareholders - VIP Engineering and Marketing Company Limited and Mechmar Corporation - took a new turn earlier this month with the news that an American firm wants to buy shares in the company that is currently under receivership.
In January 2009, the High Court of Tanzania ruled that the power producer be placed under receivership following a protracted legal battle between the two shareholders. Consequently, there is an ongoing court case as Civil Revision Number 1 of 2012 before the Court of Appeal of Tanzania involving VIP Engineering and Marketing Company Limited and Mechmar Corporation.
But in an interesting turn of events, the project finance lender to IPTL - Standard Chartered Bank (Hong Kong) Limited now wants to sell Mechmar Corporation shares to an American firm, Great White Shark Enterprises, LLC of 2014 Vista Parkway, Level 2, West Palm Beach, Florida 33411.
This has forced Mechmar Corporation, through the Dar es Salaam based Asyla Attorneys, to write to the Registration, Insolvency and Trusteeship Agency (Rita), protesting that any move to sell Mechmar shares in a company that is currently under receivership will be null and void.
"We have been informed by our aforesaid client that Standard Chartered Bank (Hong Kong) Limited has entered into a unilateral arrangement to sell Mechmar Corporation Malaysia Berhad's shares to an American company known as Great White Shark Enterprises, LLC of 2014 Vista Parkway, Level 2, West Palm Beach, Florida 33411 for a sum of 79 million US dollars under a scheme that doesn't benefit our client in any manner whatsoever," reads a statement in the letter to Rita dated 12th November 2012.
According to the letter, written by an Asyla Attorneys' managing partner, Melchisedeck S. Lutema, any move by Standard Chartered Bank (Hong Kong) Ltd to sell, transfer, alienate or deal in any way with IPTL assets without prior consent from the liquidator or receiver is unlawful.
"We wish to point out from the outset that such arrangement by Standard Chartered Bank (Hong Kong) Limited is unlawful and deplorable in the strongest terms possible because as of now IPTL is under liquidation and receivership thus no person has the power to convey, transfer, sell, alienate or otherwise deal with the assets or shares in IPTL unless the prior consent in writing of the Liquidator or Receiver has been sought and obtained," the letter reads.
It further says Standard Chartered Bank (Hong Kong) Limited does not have legal powers to label itself a creditor and unilaterally determine that its debt has been proven and go ahead to determine the amount due to it from a company under liquidation or receivership.
The legal firm asks Rita to issue Standard Chartered Bank (Hong Kong) Limited with a warning and prohibition in writing. "And please note further that we shall not hesitate, at the opportune moment, to take available appropriate legal measures so as to curb Standard Chartered Bank (Hong Kong) Limited's interference with court orders and proceedings," reads the letter.