Hwange Colliery employees to seek judicial management

WORKERS at the troubled Hwange Colliery Company Ltd (HCCL) will be going back to the courts seeking an order that places the company under judicial management instead of reconstruction as ordered by government.

By Nkululeko Sibanda

Government two weeks ago, through a statutory instrument, pulled the rug from under the feet of the HCCL board and placed the company under reconstruction.

This was after intense haggling between the HCCL board, led by Juliana Muskwe, and a divided shareholder group led by government, over the running of the affairs of the once vibrant coal mining giant.

Owing to government’s move — which players in industry and commerce argue is illegal — HCCL was last week suspended from trading, first on the Johannesburg Stock Exchange (JSE) and later on the Zimbabwe Stock Exchange (ZSE).

Workers, however, now feel the courts have to make a determination that would save the company from further collapse. And that option, they say, is judicial management.

Dumisani Dube of Mathonsi Law Chambers, who represented the workers in a yet-to-be-finalised court challenge in 2016, told the businessdigest they would be going back to the courts to seek the relief they desire.

“It must be remembered that we lodged an application to the Bulawayo High Court to have the HCCL placed under judicial management. The management, then, went behind our back and approached the High Court in Harare where they obtained a default judgment. “They cheated their way to staying at the helm of the company, but you can’t cheat your way to success. The workers will soon be going back to court to seek the finalisation of that appeal that we made at the Bulawayo High Court,” Dube said.

He highlighted that the workers’ prayer to the courts was the only measure that would put an end to the pilferage of resources at the colliery.

“It has to be noted that the decision that government has made, to place the company under reconstruction, is illegal. That is why it (HCCL) has had to be suspended from the JSE and ZSE.

“Workers are of the view that as long as the company is still under the hands of government, whether through a reconstruction arrangement or any other initiative that has a government hand in it, Hwange Colliery will always remain in the same pit. We are of the view that Hwange needs judicial management where an experienced judicial manager is appointed to run the affairs of the company. We have, as representatives of the workers, names of people who have the expertise to run the affairs of a company like Hwange that the courts can appoint as able judicial managers,” he said.

In an affidavit filed by four HCCL workers, Casper Kombana Ndlovu, Luka Katako, Simeon Tembo and Charles Ncube in 2016 and representing other hundreds of other workers at Hwange Colliery, the applicants argue that judicial management is the only way to save the ailing coal miner from further collapse.

“As employees, creditors, shareholders, and members of the company, the Applicants are statutorily entitled to apply for the placing of the company under Voluntary Judicial Management as contemplated in Section 299 (1)(a) of the Companies Act (CH24:03) and as such, they have the locus standi to institute these proceedings and seek the relief sought herein,” read the 2016 application.

The workers further argued that management had failed to act in a manner that would save the company from collapse, hence their decision to approach the courts.

The affidavit stated that, in 2015 alone, the company incurred a loss of about US$20 million as compared to the losses it recorded in the preceding year amounting to about US$7,5 million, a development workers say shows collapse, corruption and mismanagement at the company.

“As at 2014, the company had a turnover of US$72 031 451 and operating at a loss of US$51 540 220 and total current liabilities of US$209 786 707.

“… The company is currently indebted to statutory creditors amounting to US$119 604 483. Outside these normal statutory payments, trade creditors are owed US$37 249 720,” the affidavit further reads.

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