COURT HAS ALLOWED ME TO SPLIT KCM, SAYS MILINGO LUNGU
CHINGOLA, 6th January, 2021: Konkola Copper Mines Plc (KCM) notes that the Honourable Judge Fulgency Chisanga of the Court of Appeal for Zambia on 5th January 2021 rendered a Ruling on incorporating an Order on its 20th November 2020 Judgment.
KCM wishes to inform that the Court of Appeal has confirmed that the Provisional Liquidator (PL) of Konkola Copper Mines, Mr Milingo Lungu, continues to operate and function as the Provisional Liquidator for KCM. His powers as contained in the 21st May 2019 High Court Order are valid and have neither been curtailed nor vacated. Further to this, any exercise of the said Provisional Liquidator powers since 21st May 2020 is within the law and Order of the High Court, which is the competent court for the Liquidation Proceedings. This is contrary to some media speculation and aspersions that the Provisional Liquidator’s powers had been discharged or that they were curtailed.
Specifically, the salient powers of the PL, among others are as follows:
1. Carry on the business of Konkola Copper Mines so far as is necessary for the beneficial winding up of the Company;
2. Make any agreement on all questions in any way relating to or affecting the Company or its assets;
3. Take possession, custody and control of all the assets of KCM;
4. Dispose of assets by public tender or the most transparent manner under the circumstances; and;
5. Sell the real and personal property and things in action of KCM by public auction, public tender or private contract;
In a ruling dated 5th January 2021, by Court of Appeal Judge President Honourable Fulgency M. Chisanga, the Court rejected the plea by Vedanta Resources Holdings Limited which sought to discharge the Provisional Liquidator.
The Judge President in the ruling said the prayer to discharge the Provisional Liquidator had been brought up by Vedanta Resources Holdings Limited at the hearing of the Court of Appeal, without the respondents (ZCCM-IH) having any prior notice of the order and consequently did not address it. She further stated that the issue was never raised in the Court of Appeal decision of 20th November 2020.
Judge President Chisanga also said in the ruling that the notion by the appellant that a stay of liquidation proceedings automatically meant the discharge of the Provisional Liquidator did not sit well on the procedure to draw up the order by a single judge of the Court of Appeal.
The ruling by the Court of Appeal confirms the legal position taken by the Provisional Liquidator that the recent announcement to restructure and reorganize KCM into two separate companies, namely KCM SmelterCo Limited, and Konkola Mineral Resources Limited in a bid to increase efficiency and business opportunities, as well as asset and resource optimization, was within the law.
In managing the business, the Provisional Liquidator is entitled to adopt the business model that promotes efficiency and cost effectiveness. The business model so adopted is to disaggregate the company into mining and processing. This will prevent cross subsidisation between the units.
KCM has been insolvent for a long period hence the accumulation of debt to creditors and suppliers. The Shareholders have not provided funds to enable the company continue as a going concern. Under these circumstances, it is increasingly likely that the only option to fund the continued survival of KCM is through disposal of assets. The only other alternative is to cease operations.
Effective 31st January 2021, the new companies will begin to operate under the names, KCM SmelterCo Limited and Konkola Mineral Resources Limited, respectively with two separate Management structures and employee arrangements. KCM SmelterCo Limited has been in existence since 2002 and has been a fully-owned KCM company, save it has been a dormant subsidiary.
Issued by Milingo Lungu
ZWD comment: no amount of gymnastics or legal tricks will justify the criminality at KCM. Milingo Lungu should tread carefully and we will repeat the warning that it’s just a matter of time before he finds himself in prison. The same courts he is abusing now will send him to jail.