17 August 2017

Zimbabwe: Asa Executives' Wings Clipped

Troubled Asa Resource Group Plc's executives have had their wings clipped and can no longer make decisions pertaining to the running of the firm, which is now under administration.

Formerly Mwana Africa, Asa appointed Mr Mark Skelton and Trevor Birch of Duff & Phelps Limited which is based in London, to act as administrators of the company.

In a recent statement, the mining conglomerate said: "As a result of Asa entering administration, its directors no longer have any executive authority to act on behalf of the company.

"This means therefore that the board of Asa will not be able to comply with either Rule 25.1 of the Takeover Code which requires the board of an offeree company to send a circular to its shareholders in response to an offer made to those shareholders, or with Rule 25.2 which requires the offeree board to set out the board's opinion on offer and the board's reasons for forming its opinions.

"This announcement has been made with the consent of the Takeover Panel." Asa, whose shares were suspended from trading on the AIM market of the London Stock Exchange on July 28, says it chose to go on administration to allow it time to sort out its managerial and financial challenges.

Asa controls the majority of shares in Bindura Nickel Corporation and Freda Rebecca Gold Mine. The administration is not expected to affect operations at the two mines.

Given the financial challenges faced by Asa since it was taken over by Chinese investors in 2015, an offer to the miner's shareholders was made for the purchase of their shares by Richpro Investments Limited, a BVI company owned and controlled by Mr Feng Hailiang.

Mr Hailiang is a Chinese industrialist, whose net worth is estimated by Forbes at $2,4 billion. He chairs the Zhejiang-based Hailiang Group whose businesses interests include copper smelting, real estate, education and agribusiness.

However, his offer was not recommended by the directors of Asa Resource Group Plc, amid fears that Mr Hailiang was fronting Messrs Yat Hoi Ning and Yim Kwan, who were fired for allegedly running down Freda Rebecca and salting away $4 million.

It is hoped that the time in administration would enable the cash problems at PLC level, caused by what Asa management consider to be mismanagement by Messrs Ning, Kwan and their appointees, to be resolved. Messrs Ning and Yim Kwan were chief executive officer and finance director, respectively.

There is strong belief that senior managers in Zimbabwe are making great strides towards improving mining operations and hopes are high that if implemented accordingly, the company would return to normalcy.

The administrators are expected to conduct investigations into a number of matters before submitting their findings "in due course", as required by United Kingdom law.

Other officials who were fired from Freda Rebecca for fomenting divisions and perpetrating corporate governance deficits are Mr Edmund Zhang (former chief procurement officer) and Mr Yuan Hu Ching (non-executive director).

Mr Yuan was an appointee of China International Mining Group Corporation (CIMGC) in the board. CIMGC bought 16,2 percent of Mwana Africa in April 2012, and Mr Yat holds 7,6 percent of the mining concern.


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