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SMM Workers ‘Offside’ on Asking Minister Chitando for the Removal of Gwaradzimba, Says Friends of SMM (FOSMM) Secretary General, Tapuwa Chitambo

Brian Kazungu

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Mr Tapuwa Chitambo, FOSMM Secretary General

Brian Kazungu, 23/04/2021

In an article published by the Herald on 22 April 2021 under the title ‘SMM workers want Gwaradzimba out, Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU) were said to have applied for the removal of Gwaradzimba as Administrator of SMM.

It was also reported that they had done this through invoking Section 5(2) of the Reconstruction of State-Indebted Insolvent Companies Act (Reconstruction Act) which reads as follows:

Section 5(2) of the Act reads as follows: “The appropriate Minister, after consultation with the administrator, may at any time and in any manner, on the application of a creditor, a member of the company, the Master or any person who would have been entitled to petition for the winding-up or apply for the judicial management of the company concerned, vary the terms of a reconstruction order or cancel it by further notice published in the Gazette.”

However, Mr Tapuwa Chitambo, the Secretary General of Friends of SMM (FOSMM) highlighted that some conflicting issues around the status of SMM makes it strange for workers to seek help from the Mines Ministry.

“I find it strange that representatives of ZDAMWU would seek refuge from the Minister of Mines by seeking a remedy that is not specifically provided for in terms of the Reconstruction Act before establishing the status of SMM. Is SMM, a company as defined in the Companies Act or it is a creature that defies any legal persona?

Minister of Mines, Winston Chitando, and Minister of Finance, Mthuli Ncube, are on record having asserted that SMM is a subsidiary of the Zimbabwe Mining Development Corporation, as also confirmed by Gwaradzimba in a meeting with ZDAMWU representatives in March 2021.

Finance Minister, Mthuli Ncube, in his maiden budget included SMM on his list of companies to be privatized.

In clarifying his standpoint, Chitambo revealed that as Friends of SMM (FOSMM), they had made their own investigations and established the following facts:

1. Following the commencement of the reconstruction of SMM on 6 September 2004, Gwaradzimba’s first act was to dismiss the company’s board of directors.

2. In December 2005, the Reconstruction Order that was issued by Chinamasa without any judicial involvement was confirmed by Justice Kamocha on an ex-parte basis.

3. The records kept at the Registrar of Companies in Bulawayo show that on 12 November 2009, in terms of the CR2 form filed and signed by Gwaradzimba, shares were alloted to two companies Nickdale Investments Private Limited (Nickdale) that was issued 76% of the shares in the company with the balance of 24% being held by a company called SMM Holdings Limited (UK) whose address strangely was Gwaradzimba’s.

4. It follows that SMM could only be registered in the Records kept by the Registrar if it met the test of being a company and this precludes the involvement of the Minister of Mines in the affairs of the company.

5. A company necessarily is a creature of law and as such the Reconstruction Act creates no company but was part of a scheme to defeat the ends of justice.

Based on their findings, Chitambo added that in making an application to the Mines Minister, it is either ZDAMWU representatives know something that is not in the public domain or they just want to expose the fraud that has been a constant characteristic in the SMM saga.

He also stated that an admission by Gwaradzimba that his mandate was terminated, would follow that the application by ZDAMWU is ill-advised and should have been preceded by an application asking ZMDC to confirm its relationship with Nickdale.

Nickdale holds the majority of the shares issued by SMM, a development which makes the Minister of Mines to cease to have any legal nexus with SMM from the day shares were issued to the new shareholders.

This paper has established that a resolution was passed on 1 September 2011, ordering Gwaradzimba to hand over the Nickdale share certificates to former Minister of Mines, Dr Obert Mpofu, by the ZMDC board.

The shares were then handed over as ordered leading to Minister Chitando informing Parliament that SMM was a subsidiary of ZMDC based on the fact that the shares in Nickdale that were held by the RBZ were now held by ZMDC.

Chitambo concurred with ZDAMWU that Gwaradzimba continues to hold the Administrator’s office illegally since he relinquished this position to the ZMDC board chaired by Mr Ndlovu and thus also meaning that his purported ‘resurrection’ was unlawful and of no force and effect.

“Based on the above, it is bizarre that ZDAMWU would seek protection from a law that is no longer applicable in relation to SMM by asking the Minister of Mines to immediately replace Gwaradzimba with their nominee, Mr Taurai Changwa, when they are neither directors nor shareholders of SMM.” He said.

Mr. Frederick Kyle, a lawyer who has represented a number of companies and individuals including Mutumwa Mawere in litigations also commented on the matter.

“Mr. Gwaradzimba under oath has deposed to various affidavits asserting that SMM is a company still under his control and management yet in March 2021, he informed representatives of ZDAMWU that he was relieved of his duties in relation to SMM by Hon Mpofu.

He claimed that notwithstanding the fact that the shareholding of SMM had been altered and a new board appointed as required in terms of the Reconstruction Act, the reconstruction order needed to be cancelled in terms of s35 of the Reconstruction Act.

Mr. Chinhema on behalf of ZDAMWU said Gwaradzimba had intimated that Obert Mpofu (former Mines Minister) was responsible for the appointment of the board and new chief executive.

He, however, advised the workers’ union that he was re-appointed informally without any legal instrument providing for this clandestine appointment.

Pursuant to the operation of the ZMDC resolution, Mr Gwaradzimba was relegated to only deal with litigation brought against SMM by Mr Mawere.

However, it is not clear who Mr. Gwaradzimba reported to and still reports to since the handover of the control and management of SMM. Does the Minister of Justice continue to exercise jurisdiction in relation to a reconstructed company?

Assuming the control and management of SMM was not transferred to the restructured board that could only have been appointed by the company’s shareholders, then the records of SMM cannot be kept by the Registrar of Companies.

This begs the question as to whether the control of a company can be vested in anyone who is not its directors…. It is also curious how Gwaradzimba implemented a scheme of reconstruction without the knowledge of SMM’s previous shareholders.

Representatives of ZDAMWU have taken the approach that Gwaradzimba’s relationship with the company was not terminated as a consequence of the changed legal status of SMM from a company under reconstruction to a reconstructed company.

Ms. Janice Greaver, a member of the C2C-BOAF Corporate Literacy Initiative, said: “This matter exposes the pervasive illiteracy in our communities.

ZDAMWU members clearly believe that they now hold the position of some proxy shareholders of SMM on account of accrued wages and salaries incurred after reconstruction.

A company to me is a creature of law. It must have director to act in its name and not a Minister. This is absurd.”

Brian Kazungu is an Author, Poet, Journalist, and Technology Enthusiast whose writing covers issues to do with Business, Travelling, Motivation and Inspiration, Religion, Politics, and Communication among others. https://www.amazon.com/author/briankazungu https://muckrack.com/brian-kazungu http://www.modernghana.com/author/BrianKazungu [email protected] @BKazungu-Twitter He has written and published several books covering various aspects of human life including leadership, entrepreneurship, politics, personal development as well as poetry and travel. These books are found on Amazon https://www.amazon.com/author/briankazungu

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