12 November 2018

Zimbabwe: Hwange Colliery Reconstruction Justified - Ziyambi

Photo: Innocent Makawa/The Herald
Nicholas van Hoogstraten takes an oath before Mines and Energy Parliamentary Portfolio Committee in Harare.

Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi has said his decision to place Hwange Colliery Company under reconstruction was lawful as evidence that was placed before him satisfied the requirements of the law.

Minister Ziyambi said placement of Hwange under reconstruction in terms of the Reconstruction of State Indebted Companies and Insolvency Act was subject to a review by the High Court within 30 days and any affected stakeholder would get an opportunity to make representations before a judge.

Minister Ziyambi said this while giving oral evidence before Parliament's Portfolio Committee on Mines and Mining Development chaired by Norton MP Mr Temba Mliswa that wanted to know the rationale behind placement of the coal producing firm under the control of an administrator.

He said the Portfolio Committee of Mines and Mining Development in the previous Parliament had equally expressed concern at mismanagement at Hwange Colliery Company.

"There has been issues of mismanagement of funds and even this committee expressed its dismay with the way things were happening," said Minister Ziyambi.

"When the Minister of Mines wrote to me to say we have issues at Hwange of mismanagement of money, can we do something? I then sent all the documentation to the Attorney-General to say, can you check whether the information we have satisfied the Act, whether we are allowed to place the company under reconstruction.

"The advice that I got was that indeed Hwange owed Government, indeed there was mismanagement to the effect that the managing director was removed and the company was trying to hire another one. The company, according to the documentation from the Ministry of Mines, was capable of being reconstructed and become profitable.

"I then exercised my mind in terms of the Act and proceeded to advise the AG to say indeed let us put it under reconstruction."

Minister Ziyambi said while the law provided that he should inform shareholders before placing a company under reconstruction, he was also empowered to proceed and meet them at a later stage.

"The Act stipulates that when you do that, you have to inform the shareholders, but then it also provides that if in the opinion of the minister it is necessary to avert further irreparable harm to the company, creditors and employees, the minister may put it under reconstruction without affording them representation and then we can do it later," he said.

"I decided at that particular stage to exercise my powers. The law then goes further to say within 30 days we have to approach the High Court in chambers so that we have the reconstruction order confirmed. So, the process of informing the shareholders and any interested party that feels should have been addressed and if anyone feels that it is not desirable to put it under reconstruction, there is an opportunity within 30 days when a notice will have been made so that the judge can accept or reject.

"What I did as the Minister of Justice was to look at whether the requirements to put the company under reconstruction are satisfied and indeed even Honourable members would agree, the State is owed money. Nobody is disputing that there was mismanagement and there is a possibility that if the company is reconstructed, it can be profitable. These requirements were met."

Appearing before the same committee, the Government appointed administrator Mr Bekithemba Moyo said the forensic audit that the Hwange board had initiated would continue.

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