Chinese shareholders of Freda Rebecca Gold Mine Limited have approached the High Court seeking provisional judicial management for the firm due to alleged mismanagement and externalisation of funds.
BY CHARLES LAITON
The Zimbabwe Stock Exchange-listed gold mine, alongside Bindura Nickel Corporation Limited, has approached the court seeking to be placed under provisional judicial management citing serious financial crisis that has led to its debts ballooning to over
$31 331 914.
“At Bindura Nickel Corporation, an amount of $2,7 million, which was part of a $20 million loan raised through a smelter bond in March 2015, was unlawfully externalised under the pretext of remitting a deposit for the supply of technology.
“The technology has not been received and the externalised money was converted into a loan repayment to ASA by Bindura Nickel Corporation at the instruction of Yim Chiu Kwan, the then chairman of the board of directors of Bindura Nickel Corporation,” Freda Rebecca executive director, Toindepi Retias Muganyi said in his founding affidavit.
The gold mine also attributed its current operational crisis to mismanagement by ASA Resource Group (formerly known as ASA Mwana Africa Plc) investors and shareholders, China International Mining Group Corporation, whose directors have since been issued with warrants of arrest following alleged externalisation of funds.
“A forensic audit unearthed numerous financial irregularities, which were directly linked to Chinese expatriate employees, who were based at Freda Rebecca Gold Mine and Bindura Nickel Corporation. Warrants of arrest have since been issued by Zimbabwean authorities against some Chinese employees,” Muganyi said.
Through its lawyers, Wintertons Legal Practitioners, Freda Rebecca Gold Mine, filed the application alongside, Freda Rebecca Holdings (Pvt) Ltd, Bindura Nickel Corporation Ltd, Hunters Road Nickel Mine (Pvt) Ltd, Trojan Nickel Mine Ltd, BSR Ltd, Greenline Enterprises (Pvt) Ltd, ASA Services (Zimbabwe) (Pvt) Ltd, Bindura Estates (Pvt) Ltd and Mwana Properties (Pvt) Ltd.
“This is an application on the ground that the applicant companies, which constitute one economic entity, are afflicted by a temporary setback due to various special circumstances and cannot presently service their financial obligations to various banking institutions and other major creditors and that the companies have by board resolutions resolved that the companies be placed under judicial management,” Muganyi said.
“The companies have been coming under increased pressure from their creditors some of whom have instituted legal proceedings and obtained judgements. The company’s assets are therefore at the risk of being attached and sold into execution. There is a danger that, besides the bad publicity arising from the judgements, there is a real likelihood that an uncontrolled run of the asset grabbling by creditors may take place.”
The matter is yet to be set down for hearing.