Govt seeks ouster of Hwange directors

the board as part of restructuring of the group.

Sources say the major shareholder wanted the three directors to resign at the Annual General Meeting, adjourned last week after Mr Valentine Vera who represented the Government, stopped the meeting.
The Government controls 37 percent of the issued share capital in Hwange while Messina Investments, owned by businessman Mr Van Hoogstraten, holds about 26 percent.
At the AGM there were directors who had retired and seeking re-election by rotation, offering themselves for another term.

It is understood that the major shareholders opposed the re-election of these retired directors who were eligible to offer themselves for another term.
The directors seeking re-election included two independent non-executive directors Ms Rosemary Sibanda and Mr Thambani Ndlovu and Mr James Nqindi.

It is understood that one of the major shareholders wrote to the HCC company secretary that the said directors should resign at the adjourned AGM.
“Please be kindly advised that as the major shareholder is requesting your resignation as the non-executive director of HCC Limited at the forthcoming AGM to be held on June 30, 2011,” read part of the letter.
But the affected board members have challenged the legality of the directive.

According to the Companies Act, a resolution to remove a director requires special notice. Special notice is given for a period of 28 days.
Hwange has 10 board members, six of them independent non-executive directors.
Meanwhile, Hwange says it has applied for new coal concessions, amid fears that existing reserves would be exhausted by 2020. The company is also battling to resuscitate old mines as part of plans to broaden its reserve base.

Hwange public relations manager Mr Burzil Dube said the Government was yet to respond to the company’s application.
“The new concessions we are seeking should have a lifespan that exceed 100 years, he said. “If we do not secure the claims, the company is left with serious challenges, even as far as the long-term survival of our mining operations is concerned.”

Mr Dube said the new concessions that the company had applied for were in Hwange.
He said expansion into the new sites would assist in satisfying increasing demand of coal on both local and foreign markets. The company produced 2,4 million tonnes of coal last year and intends to ramp up output to 40 million tonnes by 2013.

Hwange has increased output markedly in recent months after it secured a US$20 million loan from the Development Bank of South Africa to finance capital projects, including purchase of key machinery.
As a result, the company has resumed long abandoned coal exports to regional markets, shipping out close to 70 00 tonnes a month. – Business Reporter-New Ziana.