LOCAL investors who lost out in the disposal of Independence Gold Mine to South African mining magnate Mzi Khumalo have been granted leave to sue the new South African owners in Zimbabwean cou
In the landmark ruling handed down in the Supreme Court yesterday, Stanmarker led by Lloyd Hove, was allowed to sue Khumalo for damages of up to US$40 million.
Stanmarker can now serve summons on Khumalo’s Metallon office in Sandton, Johannesburg and their local legal representatives Gill, Godlonton & Gerrans in Harare.
The ruling overturns Justice Moses Chinhengo’s High Court ruling in March last year dismissing Stanmarker’s application for leave to sue Khumalo in Zimbabwean courts.
The ruling has a huge bearing on a deal between a new consortium of local investors who acquired 30% of the gold mining concern from Khumalo. The group consists of Albert Nduna, John Mkushi and Mthuli Ncube.
Independence Gold Mine owns How Mine in Bulawayo, Redwing Mine in Mutare, Mazoe Mine in Mazowe, Arcturus Mine in Goromonzi and Shamva Mine in Shamva.
Court documents made available to the Zimbabwe Independent yesterday showthat Stanmarker was last year claiming US$27,3 million. The new claim by Stanmarker could be in the region of US$40 million due to the inflation and movement in the price of gold.
Stanmarker says in 2002 it entered an agreement with Khumalo’s Metallon to submit a joint bid to Lonmin for the acquisition of Independence Gold Mine under a company called NewCo. In the agreement Metallon was to provide all the funding for the acquisition while Stanmarker sought approval from the Zimbabwe government for the joint bid.
The company was also expected to make available a due diligence it had prepared for Independence Gold Mine. Stanmarker was also expected to negotiate with the government a gold-buying arrangement which favoured producers.
Metallon would have a 60% stake in NewCo while Stanmarker was to control 40%. In respect of the 60%, 10% was to be ceded to workers.
In the documents at hand Hove alleges that in October 2002 Khumalo began to avoid him until in the end he discovered that the South African businessmen had acquired the rich gold mine outside the agreement.
This, Hove said, was a breach of the initial agreements hence he sued Khumalo’s Metallon in the High Court in January last year.
Chinhengo in the case ruled that where a corporate entity owns assets within Zimbabwe and where the defendant may only at best indirectly benefit from the business of that corporate entity, it cannot be said that the defendant has property capable of attachment.