HARARE – The Hwange Colliery Company board, ousted after the company was placed under reconstruction by Justice Minister Ziyambi Ziyambi in 2018, says it has resumed its functions following a ruling by the High Court on February 14.

The High Court rejected an application by Ziyambi to confirm the reconstruction order after ruling that a Scheme of Arrangement between Hwange and its creditors which was ratified by the government and other shareholders with a view to save the coal mining firm from collapse, “should be afforded an opportunity to bear fruit.”

Now the Hwange board, which had been divested of control by the reconstruction order, has written to Bekithemba Moyo, the administrator appointed by Ziyambi, to immediately cease presiding over the company’s affairs.

“We act on behalf of the Juliana Muskwe-led board of directors, the board in place immediately before the reconstruction order of October 26, 2018, was issued,” the Hwange board’s lawyers Chinyama Attorneys Legal Practitioners wrote to Moyo on February 17.

“You may now be aware that the High Court of Zimbabwe dismissed the application for the confirmation of the reconstruction order by the Minister of Justice. The effect of the said judgment was to set aside the reconstruction order.

“In the result, we kindly request you and your assistant administrators to immediately cease presiding over the affairs of Hwange Colliery Company Limited. Such affairs now fall under the jurisdiction of the board of directors following the dismissal of the application for confirmation of the reconstruction order which appointed you.”

At the time of issuing the order, Ziyambi said Hwange was indebted to the state to the tune of US$220 million and the company was unlikely to repay the debt owing to gross mismanagement which was preventing the company from becoming a successful concern.

The move was opposed by a Trustee of the Debenture Holders of Hwange and chairman of the court-sanctioned Scheme of Arrangement, Andrew Lawson, and Messina Investments, who own 16.76 percent of the issued share capital in Hwange.

Justice David Mangota, in a judgement delivered on February 14, said Ziyambi “appears to have issued the order out of nothing”.

Dismissing Minister Ziyambi’s application, Justice Mangota said the reconstruction order issued to stop the implementation of a court-sanctioned Scheme of Arrangement violated Section 2 (a) of the Reconstruction of State Indebted Insolvent Companies Act.

The section is peremptory as it does not allow the minister to use his discretion. Justice Mangota said it was trite that an order which is issued in direct violation of the law “stands on no leg”.

“It is by parity of reasoning, evident that the application which the Minister made to confirm a nullity cannot stand,” the judge said.

“It will simply collapse. It will do so on the basis that the foundation upon which it is predicated does not exist.  The court in other words cannot confirm nothing.”