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THE United Kingdom Supreme Court last week reserved judgment in an appeal by AMG Global Nominees (AMG) seeking a ratification order of the shareholder register of Shabani Mashaba Mine Holdings (SMMH).
The appeal by AMG, a company incorporated in Zimbabwe, was heard by a panel of three judges, Lord Justice Chancellor Morrit, Lord Hooper and Lord Wilson on Tuesday and Wednesday. Both Mutumwa Mawere on behalf of the defendant, Africa Resources Limited (ARL) and Afaras Mtausi Gwaradzimba on behalf of AMG were in attendance. Mawere who bought SMM from its former owners Turner and Newell Ltd (T&N) in 1996 lost his prized possession in 2004 when the Zimbabwe government took over his assets. The government accused the businessman of externalising foreign currency. His assets then valued at US$400 million were expropriated by a presidential decree. In October 2004, the Reserve Bank of Zimbabwe, paid US$2 million on behalf of AMG to buy the share warrants to SMM Holdings, a subsidiary of ARL from its former owners, T&N. The share warrants were bought from Kroll who had been appointed administrators of T&N. The appeal lodged by AMG is against an order made on April 7 by Justice Evans-Lombe which threw out AMG bid to buy SMM. One of the principal grounds of appeal related to allegations that Mawere used SMM to pay for the shares at SMMH. AMG argued that acquisition of SMM in 1996 by ARL from T&N Plc was unlawful in that it was intended that SMM’s sole beneficial shareholder, SMMH, a company incorporated in England, would give financial assistance for the purpose of ARL’s purchase of the SMMH bearer share warrants held by T&N by way of security. The revelation by AMG effectively means that Mawere had not received a government guarantee when he acquired SMM in 1996. AMG argues that ARL caused SMMH’s directors to direct SMM to pay export proceeds to T&N, through the linked directorships of Mawere in respect of ARL and SMMH. AMG said that SMMH in allowing its subsidiary, SMM, to pay export proceeds gave financial assistance to Mawere’s ARL in that ARL incurred a liability under the agreement of sale to procure the payment of export proceeds to reduce or discharge its liability in respect of the acquisition. This will open an avenue for AMG to argue that T&N was entitled to deal in the shares of SMMH as it wished. Mawere said the point raised by AMG exposes the hypocrisy of the government that so far sought to argue that the acquisition by Mawere’s ARL of SMM was government backed and a guarantee was used for the purpose. "From the facts of the matter it is clear that the acquisition of SMM was done on commercial basis and the assistance came from a British source rather than a government source," Mawere said. "It is the GOZ (government of Zimbabwe) through AMG that now wants the English Court to determine the legality of a deal that resulted in a British company’s interests being transferred to a black African." Mawere questioned AMG’s source of funds to litigate after it had paid £115 000 into its attorney’s account as security for ARL’s costs of the appeal. "AMG is a creature of statute and one has to ask where the funds to litigate are coming from," Mawere said. Gwaradzimba was unreachable both on his mobile and office numbers.
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