KONKOLA Copper Mines (KCM) Provisional Liquidator Milingo Lungu has asked the Lusaka High Court to discharge the ex-parte order of injunction granted to three Vedanta Resources companies, restraining him from undertaking any reorganisation of KCM or from transferring, disposing or selling of its assets.
And Milingo has argued that KCM (in provisional liquidation) is being reorganised in order to streamline its operations and increase efficiency.
He adds that the reorganisation and restructuring of the mining company is within his mandatory power as provisional liquidator, and that no order of court is required for him to carry out functions that are incidental to the powers given to him by the court.
In this matter, three Vedanta Resources companies have sued Milingo in the Lusaka High Court commercial registry, over plans to restructure and reorganise KCM into two separate subsidiary companies; namely KCM SmelterCo Limited and Konkola Mineral Resources Limited.
The three companies also applied for leave to commence an action against KCM (in provisional liquidation).
Vedanta Resources Holding Limited, Vedanta Resources (Jersey II) Limited and Vedanta Resources Limited cited Milingo and KCM as defendants, seeking a declaratory order that Milingo does not have the power or should not exercise the power to carry out the reorganisation of KCM’s business, assets and affairs in the manner announced on December 28, 2020, or at all.
They also want an order directing Milingo whether by himself, servants or agents to immediately reverse any process of reorganisation that has been undertaken with respect to KCM.
Lusaka High Court judge Winnie Mwenda recently granted the three Vedanta Resources companies an ex-parte order of injunction, restraining Milingo from undertaking any reorganisation of the mining company or from transferring, disposing off, selling or dissipating the assets of KCM in any manner whatsoever and directing Milingo to preserve all the assets of the mining company until the determination of the proceedings.
Judge Mwenda further restrained KCM (in provisional liquidation) or its agents and senior management from undertaking or participating in any reorganization of KCM pending determination of the proceedings.
But in his defence, Milingo has argued that the plaintiffs (Vedanta Resources Holding Limited and two others) were not entitled to any of the reliefs sought.
He stated that contrary to claims by the plaintiffs, he was appointed as provisional liquidator for purposes of carrying out powers given to him pursuant to the order of appointment.
“Further, the reorganisation and restructuring of KCM is within my mandatory power as provisional liquidator and no order of court is required to carry out functions that are incidental to the powers given to me by the court,” Milingo submitted.
He stated that both KCM Smelter Company Limited and Konkola Mineral Resources Limited were subsidiary companies which were wholly owned by KCM therefore it was not true that the reorganisation was intended to remove the assets of KCM from the supervision of the court or at all.
Milingo added that KCM was being reorganised in order to streamline its operations and increase efficiency, and that all the steps taken in respect of KCM were within his powers.
He further stated that the issues raised by the plaintiffs were matters for determination under Cause No. 2019/HP/761 (the winding-up petition involving KCM) and could not be subject of determination in a separate action.
Milingo argued that the action by the plaintiffs was not properly or competently before court, and that in the alternative, all the issues in this case are matters for determination under Cause 2019/HP/761.
And Milingo has further asked the court to discharge the ex-parte order of interim injunction granted to the plaintiffs on January 16, this year.
According to an affidavit in support of ex-parte summons for an order to discharge ex-parte order of interim injunction, Milingo stated that in applying for the order of injunction, the plaintiffs concealed from the court or failed to disclose that there was an application to review his powers as a provisional liquidator pending before another judge of the Lusaka High Court.
“The application was made by the third plaintiff (Vedanta Resources Limited) under Cause No. 2019/HP/761. The said application is still pending before this honourable court,” he stated.
“The plaintiff did apply for an order of prohibitory injunction under Cause No. CAZ/8/249/2019 before single judge of the Court of Appeal. The said application for a prohibitory injunction was on similar terms as this one. In a ruling, the Court of Appeal refused the application on grounds that such application ought to have been made within the action under Cause No.2019/HP/ 0761, that is the winding up petition.”
He stated that Vedanta Resources Holding Limited also commenced an action against him and others under Cause No. 2019/HPC/ 0532, claiming among other things, an order of injunction restraining him from taking any action to effect or perfect the sale of Lot 694/M.
Milingo stated by ex-parte order dated November 28, 2019 another judge of the High Court granted an order of interim injunction in the said matter, which order was only discharged by ruling dated January 19, 2020.
He stated that he had been advised by his advocates Messers Lukona Chambers and do verily believed that the plaintifs ought to have disclosed the said material facts and circumstances to this court when applying for the injunction in the current action so that the court could take such matters into consideration when determining whether or not to grant the ex-parte order of injunction.
“Owing to the non-disclosure of the above material facts, the order of injunction granted to the plaintiffs ought to be discharged,” stated Milingo.
Hearing of the order for injunction inter-parte came up on Friday where both parties made their submissions.
Judge Mwenda reserved ruling to Thursday.