Court Reporter
Questions over the ownership and management of Botha Mine in Bindura have emerged from a court dispute involving shareholder Mr Tendai Chinyani, with court papers raising concerns about changes to a partnership agreement that initially gave a youth empowerment organisation a 60 percent share of mining proceeds.
The agreement, signed on March 22, 2016, brought together the Zimbabwe Empowered Youths United in Major Economic Sectors Acceleration (ZEYUMESA), Side Electrical (Private) Limited and the Zanu PF Youth League.
Under the deed, ZEYUMESA was entitled to 60 percent of mining proceeds, while Side Electrical would receive 40 percent.
The Zanu PF Youth League was included as an advisory stakeholder and reportedly had three seats on the management board.
Clause 4.1 of the agreement stated: “The partner Side Electrical (Pvt) Ltd shall be entitled to 40 percent from the mining profits while ZEYUMESA shall be entitled to 60 percent of such proceeds.”
However, court papers cited in the dispute indicate that a consent order issued in 2018 removed ZEYUMESA’s shareholder status and reduced its share of profits to 10 percent, raising questions about how and under what circumstances the original arrangement was changed.
The dispute has also brought the mine’s current shareholding structure into focus, alongside allegations concerning a 25-year gold-processing agreement with Ouro Tanque (Private) Limited, a company linked in the court papers to director Temba Kingsley Hlongwani.
Mr Chinyani’s application reportedly alleges that US$3 million in revenue was diverted in connection with the processing agreement. The allegation has not been established as fact.
According to shareholding details cited in the dispute, Sendoyi Trust holds 36 percent, followed by Jiwe Gold with 20 percent and Lanewiz Trading and Projects with 16 percent. Premoline holds 10 percent, while Wellington Chigumira is listed as holding six percent.
Prowatch, Knowrush and Nomsa Hove are each listed as holding three percent. Simba Nyenza, Tendayi Chinyani, Admire Chigumira, Sande Chinomona and Terrence Dick are each listed as holding one percent.
The listed interests total 100 percent.
However, the figures cited in the court papers have not been independently verified as the mine’s current registered shareholding.
The court papers allege that some share transfers were conducted through a “desktop sharing process”, raising questions about whether consideration was paid and how the transactions were valued and documented.
The transactions have also prompted questions about potential capital gains tax obligations. However, the information available does not establish that tax was evaded or that the Zimbabwe Revenue Authority suffered a loss.
The 2016 deed sought to establish safeguards for business decisions. Clause 11.2 stated: “In future, all agreements, deeds or business documents that require the signature of Side Electrical, shall be ratified by the Board Chairman and Secretary Representatives of both parties.”
The dispute raises questions about whether these procedures were followed in subsequent agreements. The court papers also reportedly allege that Hlongwani paid himself a monthly salary of US$45 000 without board approval.
The allegations require assessment against the relevant company records, contractual documents and court findings. The parties’ responses are also important in establishing the circumstances surrounding the disputed transactions.
At stake are not only questions about the mine’s ownership and management, but also whether the original partnership’s youth empowerment objectives have been realised, particularly for young people and women in Bindura.
Zanu PF Youth League Mashonaland Central provincial chairman Cde Emmerson Raradza could not be reached for comment, as his phone rang unanswered.
