The Lusaka High Court has ruled Vedanta Resources could not be included in proceedings to wind up its Konkola Copper Mines (KCM) business in Zambia.
And Vedanta says reports that President Edgar Lungu expects talks with potential buyers of KCM to conclude within a month are deeply worrying.
High Court judge Annes Banda-Bobo said the court was unable to “order a joinder of the intended second respondent to the proceedings” but granted Vedanta leave to appeal the ruling.
The application was made by Corpus Global and Mulenga Mundashi on behalf of Vedanta.
Justice Banda-Bobo today also set 4 July 2019 as date for hearing the request by KCM Directors to be represented by Lusaka-based law firm Nchito & Nchito on the appointment of the Provisional Liquidator and on any winding-up hearing.
And in a statement, Vedanta says it will challenge any sale of the business.
The firm says it is Vedanta is disappointed that Justice Banda-Bobo rejected its application to be joined to the confirmation hearing for the appointment of a provisional liquidator for its subsidiary KCM.
It states that the Zambian government has unfairly tried to exclude Vedanta from decisions about KCM’s future.
“It cannot be right for ZCCM, the minority shareholder to pursue this process without
the majority shareholder being heard. Vedanta was also displeased to learn ZCCM had
been allowed to modify its original winding up petition, again on an ex-parte basis,” it states.
Under the Winding-Up Rules 2004, a person who intends to appear on the hearing of a winding-up petition shall file into court a notice of that person’s intention in Form 3.
Vedanta says it will consider whether to file a Form 3.
“There are no just or equitable grounds to wind up KCM. The company directors appointed
by ZCCM approved its financial statements on a going concern basis in early May this year. All that has changed since then is the appointment of the Provisional Liquidator.”
“Vedanta believes the appointment of the Provisional Liquidator, has placed KCM under
additional financial pressure. Winding up proceedings risk lost jobs, reduced employee
benefits and creditors’ claims not being respected. The Provisional Liquidator’s removal of several knowledgeable managers seconded from Vedanta to KCM has also deprived the
business of vital experience when it is already operating in a destabilised environment,” it says.
Vedanta says it also intends to take urgent alternative steps against ZCCM’s winding-up petition.
“As previously been stated, ZCCM’s actions are a breach of the KCM shareholder agreement
which requires a process of engagement on any disputes between the shareholders and,
failing agreement, resort to international arbitration in Johannesburg.”
And Vedanta says reports that President Edgar Lungu expects talks with potential buyers of KCM to conclude within a month are deeply worrying.
“They imply that a decision to sell the assets
was taken in advance of any Court ruling and without Vedanta being given the opportunity to
be heard. KCM is not for sale and Vedanta will challenge any attempt to sell the business
without its consent,” the firm says.
“Vedanta wishes to re-emphasise that it remains open to engagement with government to
resolve this matter in a mutually satisfactory manner.”
I am waiting for the name of the company which will invest in a soiled business like this one.
This whole thing will end up very dirty.
Let’s roll …
I am looking forward to learning the legal precedents that will be set from this case. Mutembo Nchito’s appearance on the scene makes things even more interesting. He has made known to the court certain information that give this matter a new dimension.
Never in a million years did these crooks think that the Zambian Govt could actually flex it’s muscles. Now they are panicking. Unfortunately, the “train has already left the station” as they say. After acting with impunity and disregard for many years, now Vedenta is concerned about issues they ignored and paid scantly attention to? Issues such as workers benefits, Job loses, and mutual benefits?
It’s like in an abusive marriage, if an abused partner makes up their mind to leave the relationship, good luck trying to convince them to stay. Vedenta abused this “marriage” and the “ABUSED” (Zambia) ain’t coming back….bye bye!!!
Grabbed by crooks, from crooks, for crooks… the people of Zambia will gain nothing from all of this
All of this does not go down well with foreign investors. You spent huge amounts of tax payers money travelling the world in order to ‘lure foreign investment’. When they finally set eyes on our country, you weren’t exactly creating a good impression. I would not invest my money in a country where my voice has not podium. The safety of my money would be in jeopardy
At Law ZCCM-IN cannot sell KCM (20%) Assets without Consent from Vedanta the Majority Shareholder (80%). While this might be approved in controlled Zambian Courts this will not pass in an International Arbitration Court. In terms of the KCM Shareholders Agreement Vedanta’s Consent is required to sell KCM Assets. Even in Marital Divorce a Judge cannot dissolve a Marriage without hearing both the Husband and Wife. Vedanta has to be heard and must give its approval for the Liquidation to succeed. The writing is on the Wall.
The Chinese of cause, they know our leaders have a weakness for money. They must have given him a bag full of money no wonder the urgency to liquid kcm. I think they’re the only crazy ones to buy a company still in legal limbo
Clearly this Judgement was cobbled in State House and not in the High Court. This Case has been choreographed in State House and that’s why Lungu while in Maputo revealed that Zambia will have a New Investor in KCM by Mid July 2019. Where in the World would an Impartial Court dissolve a Marriage between 2 People without Hearing the grounds of Divorce from the Wife and Husband? We are witnessing a familiar ECL Pattern where a Lungu controlled Judge is using a Technicality to deny a Majority Shareholder his Right to be Heard. This is a repeat of the HH and GBM Petition where the Petitioners were denied their Right to be at Concourt. We don’t like Vedanta but we think its being treated unfairly. The PF controlled Judge is buying time for the Liquidator to strip and sell all KCM Assets to…
Well pointed and said.
The govt has to move fast because the whole thing involves people’s lives. A new investor has to come in by mid-july so that miners can continue getting their salaries, suppliers being paid…………….
On this Mr president, you have my support. My only worry is that Zambians we love INCEKELAKO. We have more pockets to fill instead of Zambia. I wonder how Zambia will be in 30 years from today……God help us
Zambia in 30 years will still exist but it will be ruled by China. The common man will be suffering more than in the Colonial days in the past. I FEEL SORRY FOR THE FUTURE GENERATIONS.
Lovely country gone to the dogs.
The statement attributed to the President regarding the new investor for KCM is prejudicial to say the least.This has just given VEDANTA some ammunition against the Govt/ZCCM-IH even when VEDANTA is seemly a culprit in this matter
VEDANTA has no ammunition if you understand the rules of liquidation. Unfortunately, Zambians want to express ignorant opinions on matters they least understand.
@ Duda..I am abreast with the liquidation process.This(Liquidation) is the route pursued when a company cannot return to a profitable state and thereby avoiding bankruptcy.Here,VEDANTA are still contesting liquidation in courts apparently in preference for something favorable such as receivership hence my argument that they have been given some ammunition afterall they are majority shareholders.
@ Duda….It should read..This(Liquidation) is the route pursued when a company cannot return to a profitable state and thereby thus facing(and NOT avoiding) bankruptcy.
@Sharp Shooter, Your response to @Duda has completely exposed your lack of in depth understanding on liquidation process. It has nothing to do with a company returning to profitable state. It’s all about INSOVENCY…Failing to pay debts as they fall due. Unfortunately for your Vedanta friends they don’t have any ammunition as you are insinuating. They dribbled themselves the moment they neglected to pay their bills.
@ Danielle
Ideally,when a company is struggling financially,receivership is the first option so that the company can be restructured by a trustee or whoever is appointed until such a time that it(company) returns to a state of being profitable in order to avoid bankruptcy. However,if the insolvency levels(inabaility to pay debts) are beyond restructuring,then that’s when the Liquidation(Winding up) route is considered because apparently the company is bankrupt(Insolvent) i.e unable to pay debts.Now my question is,if VEDANTA has accepted being insolvent/bankrupt ,why are they contesting liquidation in the courts of law? Thats why they are wary of a new investor taking over cos they feel they are still able to run the mine if certain issues are addressed.Thats the ammunition I am…
That’s the ammunition I am talking about. Iam not supporting VEDANTA but merely trying to following the legal path that will see other investors not being averse to Zambia as an investment destination.
@Sharp Shooter, Whether Vedanta ACCEPT or NOT ACCEPT that they are insolvent is irrelevant. What is important in a Liquidation petition is proof by the petitioner that the firm is failing to pay debts when they fall due. Vedanta/KCM have consistently failed to pay suppliers and contractors for a very long time now. As for your proposed route of receivership, that can’t happen because no one wants to give back the mine to those Indian crooks after the creditors are fully paid their dues. Do you really know how useless these Vedanta chaps are? Go to Chingola and see for yourself the destruction these clowns have done to the once cleanest mining town.
@ Danielle…’As for your proposed route of receivership, that can’t happen because no one wants to give back the mine to those Indian crooks after the creditors are fully paid their dues.’
So you are very sure all the creditors in their hierarchy of priority will be paid during the liquidation process.Fair enough and next time let those involved in the sale do a due diligence before picking the prospective buyer,otherwise my worry is, this could deteriorate into another ZAMTEL saga when its goes to international courts.
The Decision to kick out Vedanta out of KCM was made a while ago and the Zambian Govt has already identified a New Shareholder possibly thru a Debt/Equity Swap. What remains now is for a PF Judge to endorse the deal in Court thru Technicalities. Vedanta should not waste time seeking Justice in Lungu Controlled Courts. Vedanta should seek Justice in the International Arbitration Court where ECL has no influence. What remains is for Vedanta to make its Case in the International Arbitration Court and seek damages and Compensation from their investment in KCM. They should get hefty fines, damages and Compensation from the Zambian Govt and re-capitalise their Businesses in India and the World over. Foreign Investors in Zambia should learn from Vedanta. Its very risky to invest in Zambia under…
You should be ashamed of your comments. How can any sane person or Zambian for that matter support such claims against our Country in favour of the Vedanta conmen?
@Digga, don’t mind these frustrated economic refugees
Why did VEDANTA de-list from the London Stock Exchange? Bane, don’t make opinions on matters you least understand. I know the whole issue is politically exciting but please, spare yourselves the embarrassment.
Unfortunately, this is the message we are sending; Zambia does not follow the rule of law and that even if you are a majority shareholder, we can take over your business.
These Vedanta chaps are not the right type of investors, but we shud follow the law when getting rid of them. What’s so difficult with that? We are still paying compensation to Lapgreen! When will we learn?
You worry about what Zambia will be in 30 years time. Why should what we are told is God’s favourite country not have a bright future? This land is blessed we are told. Just Ask God to give you all that you want.
BYE BYE VEDANTA. THATS HOW THE GUY CLINCHED THE THIRD TERM FROM SOLWEZI AIRPORT EVEN BEFORE THE JUDGEMENT WAS DELIVERD. VEDANTA U HAVE HEARD FROM WHAT THE GUY SAID FROM MAPUTO. ITS FINAL BYE BYE
I don’t support Vedanta but the way this Divorce is being handled by GRZ worries me. I find that Vedanta is not being treated fairly. Its like a Wife going b4 a Judge in Court and Divorcing the Husband without his knowledge and say. How can a Professional and Objective Judge grant such a Divorce Certificate without the Husband’s Consent? This is a breach in Natural Justice. Vedanta is an 80% Shareholder in KCM and its Agreement to a Divorce. GRZ will lose this Case if this Case is placed b4 the International Arbitrators. The writing is on the Wall.
You people who do not work for this Indian Company called Kcm you really do not what we have been subjected to with this foolish Indians who think Zambia owes them an explanation. These are crooks without shame. In fact if Mwanawasa was alive we as well needed a very serious explanation as to why he sold them the Big Mine that was making profits before giving it this crooked indian, because as far as I am concerned Mwanawasa just gave them for free. Today the mine has no assets its just a scrap and you guys who do not what obtaining on the ground want to support this, that we Zambian are taken for granted
I have yet to meet anyone who agrees that Vedanta is a reliable mining partner. Yes, they are crooks but the way the Zambian government is going about things could lead to the country losing again to this same Vedanta.
@RCS,dont exhibit your dullness here.
ZCCM IH have a 20% shareholding in KCM and have board members who look at the company operations every year.All this time,they were silent and enjoying the directors fees and bonuses.Today,they say something is wrong with KCM.
KCM and Vedanta should publish the board meeting minutes for the last 5 years.Lets see what contributions ZCCM IH was making towards the workers plight.
for all the merits and demerits of the Vendata case aside, we are now on a dangerous trajectory under the Lungu leadership. The fundamental Right to be Heard has now became the right Not to be heard under our constitution. The judges have rewritten the law, its done , its settled , we are finished . No more rule of Law.
It all started with the 2016 Presidential petition , then the post newspaper liquidation and now Vendanta. who is next if i may ask? lets be clear, we are done. There is a miscarriage of justice in the land and for those that think are safe ; Wait your turn is coming.
Arm twisting tactics should come to an end. Let this be a lesson to all. No going back, please.
THIS WILL BE ANOTHER ZAMTEL SAGA.
The Zambian judges will rule in favour of the PF.International courts will rule in favour of VEDANTA and award them a big compensation like LAPGREEN.In the end , KCM will be cursed with huge liability on its books just like ZAMTEL.
NO OTHER INVESTOR WILL PUT THEIR MONEY IN KCM APART FROM THE CHINESE.
FOR THE CHINESE ITS ABOUT RECOVERING THEIR NKONGOLE(ask the Sri lankans,the will tell you) .THE PF NEED THE KICKBACKS TO FUND THE 2021 CAMPAIGN.
This is not about favouring one or the other. Why do some bloggers ‘conveneintly’ conclude that when one argues against the current process chosen, then they are Vedanta supporters? Very illogical and irational thinking. The question is; Is this the best course of action the government could have taken in it’s quest to regain control and benefit from the resources on behalf of the country? The objective may be ‘noble’, but the path taken may be counter productive or backfire. This is a preliminary issue that Vedanta is arguing – based on natural justice that grounds the right to be heard. Vedanta has an interest in the matter whether we like it or not and it would seem an injustice if the courts simply ‘parry’ the company away. Due process has to respected and applied fairly.
I am not a Vedanta supporter but Natural Justice requires that Vedanta’s Right to be heard in Court be respected. In a Divorce case its only fair for a Judge to hear the grounds of Divorce from both Husband and Wife b4 dissolving the Marriage. It is illegal and unfair for the High Court to sanction the Liquidation of KCM by ZCCM- IH (20%) without hearing the Vedanta, KCM Majority Shareholder (80%). Just like the Zambian Courts denied Presidential Petitioners (HH & GBM) their Right to be heard, they are denying Vedanta its Right to be heard as a Shareholder in KCM. This is wrong, illegal and unconstitutional. In an International Arbitration Court its obvious that Vedant will be vindicated and will be heard in Court in terms of the KCM Shareholders Agreement. The writing is on the wall.
Lungu’s justice system is the Chawama justice system. Ever since he came on the scene everything has become organised criminal and corrupt justice system. Nowonder he was debarred by LAW. You can’t practice law by doing deals with judges. This judge has just turnished his career by listening to Lungu. When the case goes to the international Court it will be his reputation on the line, not that he had any. Lungu won’t be there to defend him. Unfortunately it’s the tax payers that are going to foot this bill because of stupidity. As for workers they can forget about any work in the near future untill Lungu’s mess is sorted out. More debt for lawyers and compensation to Vedanta. It’s a price you pay when you put thieves and a visionless person in leadership.
Vedanta should apply for an injunction in the ConCourt and meanwhile launch proceedings with the international Court.
Vedanta has failed.Honestly how can a copper mining company start stripping existing infrastractures and sell as scrap?All of you who are suppprting vedanta dont have the heart for the employees and the country.
We seem to have all the ills committed by Vedanta well documented…why are we intent on using technicalities instead of a straight forward knockout punch on chin for Vedanta ?…why not allow them to be heard and beaten pants down…
Time wasting. Things have to continue moving an that mine. Another investor. please