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Auxilia Katongomara, Chronicle Reporter
JUSTICE, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi has been summoned to appear before the Parliamentary Portfolio Committee on Mines and Energy on Monday to explain Government’s decision to place Hwange Colliery Company under the control of an administrator.

Last week, Mines and Mining Development Minister Winston Chitando appeared before the same committee and defended Government’s decision, saying there were no prospects of a turnaround amid rising debt.

The company is heavily indebted and owes the Government in excess of US$150 million.

Government owns a 52 percent stake in the company.

In an interview on the sidelines of the pre-budget conference yesterday, mines and energy committee chairperson Norton legislator Mr Temba Mliswa said Minister Ziyambi was summoned to explain if due process was done in the reconstruction exercise.

“We want to ensure that everything is being done within the rule of law. So the Justice Minister is coming on Monday with all the other shareholders of Hwange (Colliery Company) to appear before the committee. He is coming because the reconstruction is under him in terms of the law, he does administer it,” said Mr Mliswa.

However, later during the pre-budget seminar, Mr Mliswa asked the Minister of Finance and Economic Development Mr Mthuli Ncube about Government’s “interference” in the reconstruction of Hwange Colliery.
“Government must allow due process to happen when there are other shareholders. The Hwange situation is one in particular. How does Government go and reconstruct a company which has other shareholders? Can’t Government just exercise that level of ensuring that there is corporate governance at the end of the day?” asked Mr Mliswa.

However, Minister Ziyambi responded to the question during the same session, saying the reconstruction of parastatals falls under his purview as stipulated by law and explained the process.

“Let me start by saying that, I remember sometime this year the chairperson of the portfolio committee on mines called in the management of Hwange Colliery. He expressed his displeasure at the way they were managing the company and he was unhappy that the State was giving the company money and they were not performing.

“What Government then decided to do was, there is a provision within the Reconstruction of State-Indebted Insolvent Companies Act which allows the Minister of Justice when he sees that a company that owes the State money or if it appears to him that it’s not performing or for whatever reason he believes that the company is not performing, the Act allows him to put it under reconstruction if it appears that the company put under reconstruction can be turned over and be profitable,” he explained.

“The Act indicates that you can do two things, you can inform the shareholders that you are doing this or if it appears to the Minister that doing that will prolong the process and Government will lose money, the Minister can issue a reconstruction order.

“What Honourable Mliswa has to understand is that once you issue the reconstruction order, the administrator has to assess the State of the company and advise the Minister that this is the state of the company when I took it over.”

Minister Ziyambi said the Act also indicates that within 30 days the minister has to go to a judge in chambers to confirm the reconstruction order.

“So there are legal processes that need to be done. When you go to the judge you have to show cause that shareholders have been informed and shareholders can actually make representations to the judge. I’m not sure, the very same committee that was concerned about Government losing money is now concerned that Government is now taking action to ensure that shareholders and Government do not lose money,” said Minister Ziyambi.

Government announced the reconstruction exercise in an Extraordinary Government Gazette last month.

The Extraordinary Government Gazette read: “(a) The Minister of Justice, Legal and Parliamentary Affairs (Ziyambi Ziyambi) hereby in terms of section 4 of the reconstruction of State-Indebted Insolvent Companies Act (Chapter 24:27) (No.27 of 2004) issues a reconstruction order in relation to Hwange Colliery Company Limited.

“(b) Appoints Bekithemba Moyo, the co-founder and director of DBF Capital partners having its principal place of business at No 2 Downie Avenue, Belgravia, Harare, to be the administrator of the company under reconstruction.”

“Other members of his team include Ms Mutsa Mollie Jean Remba, who is the current managing director of Dube, Manikai and Hwacha who will be serving as the assistant administrator and Mr Munashe Shava who is the chief operating officer and project leader at the Great Dyke Investments.

“Mr Shava is also going to serve as the assistant administrator.”

The gazette further reads: “Direct that, from the date of publication of this order — the company under reconstruction shall be under the control and management of the administrator, and the boards of the companies under reconstruction shall be divested of the control and management of the companies’ affairs and any person managing or controlling the companies’ affairs in any capacity other than as simply a member of the board referred to above shall continue in the office subject to the control and direction of, and be answerable to, the administrator.”

— @AuxiliaK