On 14 October 2020, during the height of the pandemic, Mukoma Masimba, a member of the Justice Under Rule of Law (JUROL) who is based in Australia battled with the rationality of a judgment granted in relation to Zimre Holdings Limited (ZHL), a listed company on the Zimbabwe Stock Exchange (ZSE) whose control and direction was altered by a self-help scheme that received the nod by Justice Makarau resulting in him penning an article to express his embarrassment that a judge who took an oath to defend, uphold, respect and obey the Constitution would surrender her integrity and put the entire judicial system into disrepute without anyone noticing.
Q: What was the matter about?
MM: This matter involved 4 parties i.e. THZ Holdings Limited, a company registered in terms of the UK laws, ZHL, ZSE, and a creature of statute in the name of SMM Holdings Private Limited (SMM) under the control of a state-appointed Administrator, Mr. Afaras Gwaradzimba as set out below:
Q: Is there anything unusual in the parties to the suit?
MM: Indeed there is. THZH is not a direct shareholder of ZHL and as such, I would be concerned that a grandfather of ZHL is a litigant in Zimbabwe in relation to the affairs of a grandchild, so to say. I am also surprised that the late Chris Andersen acted for Mr. A.M. Gwaradzimba (in his capacity as the purported Administrator of THZH), a UK-registered company.
The only explanation for this absurd construction is that what is prohibited by international law, which is a law of Zimbabwe, was permitted in this instance to allow a Zimbabwean law to have extraterritorial application.
I am still trying to understand the relationship between an Administrator appointed by a Minister and a company, a juristic entity that is a creature of law.
It is trite that the control and management of a company are vested in its directors, who are in turn appointed by its shareholders.
The effect of a reconstruction order is to divest and deprive shareholders and directors of the control and management of a company.
It follows that the administrator and directors are mutually exclusive. A company cannot have two centers of power.
What I have learned in our University of FOSMM platform is that a company without shareholders and directors is no company at all and this raises the question as to what becomes of a company whose shareholders and directors are removed as a consequence of non-judicial proceedings?
This is the question that I expected the Learned Judge to pose to Gwaradzimba when he purportedly published a notice in the local press announcing that ZHL was under his administration.
Below is an extract of the first paragraph of Makarau J’s judgment:
Q: If you were Makarau J, what would have been your immediate reaction to the fact that shareholders and directors of ZHL were divested and deprived of their legal nexus with the company in terms of The Presidential Powers (Temporary Measures)(Reconstruction of State-Indebted Insolvent Companies)(Regulations 2004.
A: I would have been outraged by Gwaradzimba’s audacity to approach a court of law after having engaged in a self-help scheme.
I call this self-help because he determined that ZHL must be placed under his control without notifying the affected company prior to the issuance of this extrajudicial order.
I would have interrogated Gwaradzimba to provide the legal authority that permitted him to issue a limiting order in relation to a juristic entity that is recognized as such by law.
I would have queried the legality of regulations overcoming the limitations imposed by the constitution that only judicial orders carry the limiting power in relation to the rights and freedoms of affected parties.
The decision by a judge to postpone a matter before the court is highly questionable and problematic.
I understand that during the court proceedings held last week, Makarau JCC was asked by Mr. Tichaona Mupasiri to explain under what circumstances a pedestrian like Gwaradzimba was able to enjoy the attention of the Court, especially having regard that he had no shareholding relationship with ZHL to permit the court to afford him any rights including that of postponing the matter to allow him to make any representations.
This to me constitutes a RED FLAG and exposes the Learned Judge’s partiality and disdain for the rule of law.
The legal and constitutional basis on which the Learned Judge made a call that Gwaradzimba should be joined in proceedings in which ZHL, Endurite, UKI, ZHL were interested parties baffles me.
Q: What is the significance of the ruling by Makarau J to postpone the hearing of the dispute brought by THZH to consider whether Gwaradzimba should be joined as a party?
MM: Makarau JCC already showed her hand by anticipating what would follow and did follow that Gwaradzimba notwithstanding the fact that SMM had no shareholding relationship with ZHL let alone Gwaradzimba had the authority and incumbency to act as a representative of a company whose control and management had been hijacked by an act of state.
What Gwaradzimba was asked to administer could not have been a company by any description?
A company is a creature of a Companies Act, which must be a law of general application. The whole reconstruction affair creates no company at all and as such a company indebted to a creditor, does not become a new creature that is recognizable in any constitutional republic.
As I will demonstrate in Part 11 of this conversation with a layman like me, I will demonstrate that Makarau JCC acted ultra vires the constitution and her oath by recognizing the authority of Gwaradzimba to act as a representative of a captured company.
I will also compare and contrast the attitude of Makarau JCC compared to how Mangota J acted when asked to confirm a reconstruction order that Minister Ziyambi had issued in relation to Hwange Colliery Company Limited (Hwangwe).
It is my contention that Makarau JJ had no jurisdiction to recognize and assert any purported rights that Gwaradzimba, in his capacity as a state organ, had in relation to the affairs of ZHL.