Kitwe High Court judge Abha Patel has joined Mopani Copper mines to a case where hundreds of miners have sued Stanbic Bank for illegal deductions and illegally increasing interest loans from 15% to 40%.
Mopani Copper mines had refused to be part of the court case claiming that it has no interest in the matter. But the Court found that Mopani had a big role to play in the deductions of money from miners’ accounts on behalf of Stanbic.
Mopani has been given 14 days to file its defence and has been ordered to pay the miners legal costs for this particular case.
This is in the ongoing case where 154 miners working for Mopani Copper mines have sued Stanbic Bank Zambia Ltd for illegal and exploitative deductions from their accounts and for illegally and unilaterally increasing their loan tenure from 5 to 10 years, and from 15% to 40%.
In a class action case, the miners applied to the Kitwe High Court for an interim injunction to stop Stanbic from deducting money from their salaries until the court decides whether the Bank is in order to do such deductions.
In 2013/2014 Stanbic and Mopani entered into an agreement whereby stanbic agreed to provide scheme loans to Mopani copper mines employees. Mopani was obligated to deduct money from employees’ salaries and remit it to the bank.
According to sources, Stanbic was selected to provide this financial service because it hoodwinked Mopani that it offered the most affordable and wide range of products. The interest rate at the time of signing the loans was 15% and the tenure ( period of contract) was five years.
But barely 3 months into the loans contract, the bank unilaterally increased interest rates to the detriment of the miners. Stanbic continued with the variations (increments) of interest rates until they reached 40% from 15%.
Mopani copper mines terminated the MOU following a misunderstanding arising from the bank’s upping of interest.
The net effect of such variations was that the loan tenure changed from 5 year to 10(on paper) and might even be for life if not stopped, according to court papers seen by the Watchdog.
Miners are therefore challenging the legality of such variations and have applied for an interim injunction pending determination of the matter.
But judge Patel refused to make the other 261 affected miners who wanted to be part of the action. The judge said that only the 154 miners who are appearing on the list will be allowed to proceed with the case against Stanbic and Mopani.
‘The 261 plaintiffs who intended to be joined have been left without any other option but to commence a similar court action with similar pleadings. There is no law which can prevent a person from suing another person if that person is aggrieved,’ a person familiar with the case told the Watchdog.