Rajan Mahtani has failed to take control of Zambezi Portland Cement in spite of receiving support from government through the deportation of his competitors in unclear circumstances.
The Lusaka High Court yesterday threw out his application for the appointment of receiver Timothy Mushibwe in an act that would have given him control of the company.
Judge Flavia Chishimba described as speculative and unsubstantiated Mahtani’s claims that the business was in danger of collapsing because the owners had been deported by government.
The Judge noted that Mahtani’s claim to shares in the company was in dispute and could not therefore be legitimised by an order which implied that he had such interest.
The company owners, she said, had made sufficient administrative and management arrangements to enable the company continue running.
Mahtani claimed that he had interest to appoint a receiver for the company because Finsbury investment his company had guaranteed the loan Zambia Portland Cement obtained from PTA and that if Zambezi Portland collapsed, Finsbury would be responsible for payment of the debt.
The Judge rubbished the claim as being speculative.
Mahtani wanted Mr Mushibwe as receiver and manager to take possession of all assets of ZPC, all the stock-in-trade and effects of the business together with all deeds, documents, books and bank accounts and papers relating thereto.
He contended that their interests in ZPC were at risk stating that there “has been no members or directors’ meeting since 2008 as every attempt has been resisted by the defendants who have obtained injunctions before the court in Ndola preventing the same.”
“The affairs of ZPC are not being managed in the manner stipulated by the Companies Act and its Articles of Association. The defendants and his son have been deported from Zambia and the affairs of ZPC are in the hands of people who have no vested interest in it and ZPC is not able to manage itself” he claimed
But Judge Chishimba, in her ruling said what was at hand was whether the property was in danger or in jeopardy and whether Finsbury had established that the said property was in danger of collapsing.
The judge said that the court appoints a receiver for the protection or preservation of property for the benefit of persons who have interest in such property adding that a proprietary interest was not required.
The judge said that apart from the plaintiff showing a case of adverse and conflicting claims to the property, the applicant must show the danger or loss demanding immediate action and of its own right, it must be reasonably clear and free from doubt.
“I have considered all the circumstances alleged of property being in danger by the plaintiff. The non holding of members/directors meetings, the issue of deportation of defendants and managers of ZPC, the loan guarantee to PTA, lack of filing of financial annual reports.
There is evidence on record that the defendants have taken interim measures and appointed the operations and marketing man ager. The issue of credentials in my view is not ground that the property will be in imminent danger” she said.
She added that the late filing of financial annual returns which is a breach is not ground upon which an order of receivership can be obtained.
“I am therefore not satisfied that the plaintiff herein has in the affidavits on record established and proved that the property is in danger. None of the requirements for the granting of the appointment of a receiver has been made out” she said.
“So the foregoing reasons, the plaintiffs application for appointment of receiver/manager is hereby dismissed adding that “it therefore follows that the ancillary reliefs sought of possession and injunction accordingly falls.”
Meanwhile Zambezi Portland Cement Limited (ZPCL) has denied that it owes the Zambia Revenue Authority (ZRA) KR353 million (K353 billion) for various tax offences which included submission of false returns among others.
Operations manager under the management of Antonio Ventriglia, Mwamba Kayula said the claims that the cement company owed such amounts of money were false and never reflected anywhere in the financial reports of the company.
Mr Kayula said that as far as management of the embattled company was concerned there was some correspondent between ZPCL and the ZRA over taxes.
He said the correspondence with ZRA was clear and that the aggrieved parties were free to verify with the institution.
And according an agreement by the ZRA and the ZPCL which was signed by Alice Musonda and Erick Mwanamambo ZRA officers on 1st November 2012, the grand total that was owed by the cement company was K23 million (K23 billion).
However, some concerns have been raised as to why some people working with unknown persons wanted to inflate the figures.
(SEE PAGE 8 for the ZRA Agreement.)