Sat, 27 Jan 2018 10:38:35 +0000
BY CHIKUMBI KATEBE
FIRST Quantum Minerals has lost a court case to have a matter worth US $1.4 billion against them set aside after ZCCM-Investment Holding alleged that the company fraudulently obtained money from Kansanshi Mining Plc without informing the shareholders.
And the Lusaka High Court has denied ZCCM-IH an application to criminalize the matter as it would be dealt with under the case before court.
This was in a case in which ZCCM-IH sued the Canadian conglomerate for US $1.4 billion over claims that FQM borrowed US $2.3 billion from its mining subsidiary, Kansanshi Mining Plc without prior notice to them being the minority shareholder.
High Court Justice Winnie Mwenda in her ruling yesterday threw out the application to set aside the legal action for what she said were irregularities.
ZCCM-IH earlier argued against the application to set aside the suit against FQM and its directors claiming the case was sincerely before court and so should be allowed to stand.
In its affidavit, ZCCM-IH charged that the applications by the FQM chairman and chief executive officer Philip Pascall together with other directors Arthur Pascall, Clive Newall, Martin Rowley and Kansanshi Mining Plc be set aside for irregularities because it was statute barred.
They claimed FQM group and its directors concealed the use of the money from Kansanshi Mining Plc which matter ZCCM-IH only discovered accidentally in 2015 and hence their move to take legal action.
But First Quantum in response to the suit filed an application to have the case dismissed as the case was commenced by a minority shareholder.
They argued among other issues raised that ZCCM-IH took the step to sue them without approval of the ZCCM-IH board, claiming it had been dissolved when proceedings began.
“The issues raised by the parties in their respective affidavits are, in my view, so contentious that disallowing them to go to trial would not serve justice well.
In view of the forgoing, the application by FQM to set aside writ and statement of claim for irregularity are wholly dismissed,” Justice Mwenda said.
She explained that while it was obvious that ZCCM-IH had sued on allegations of fraud, and that there were numerous issues of contention that arose thereof, Dr Mwenda said the matter would have to be put on trial on its own merit.
The US $1.4 billion claim by ZCCM-IH was against the money borrowed, which they claimed was fraud based on cheap financing that involved $228 million in interest rate calculated on the $2.3 billion loans FQM borrowed from its subsidiary, Kansanshi, and a 20 percent principal amount (translated to be $570 million).
