Online Reporter
Business Reporter
The Zimbabwe Diamond and Allied Minerals Workers union (ZDAMWU), has appealed a recent High Court judgment that dismissed its bid for RioZim to be placed under corporate rescue.
The court had dismissed the union’s application because it lacked legal standing to initiate the proceedings.
ZDAMWU, alongside employees Precious Mwanza and Owen Kapeta, had earlier approached the High Court alleging that RioZim was in severe financial distress.
They sought an order to place the company under the supervision of a corporate rescue practitioner, arguing that liabilities exceeded assets and that the death of a majority shareholder had left a capital injection void.
However, RioZim successfully argued that ZDAMWU was a trade union for the “mining industry” generally, rather than specifically for RioZim employees as defined by the Insolvency Act.
In its appeal, ZDAMWU argued that the High Court erred by dismissing the case on a technicality.
It maintains that the union is a “creditor” of RioZim because it is owed statutory subscriptions and therefore is an “affected person” under the law.
Further, the union says the High Court also ignored the situations of the second and third applicants, who are employees directly owed salaries.
The applicants also argued that the High Court misconstrued Section 130 of the Insolvency Act, which the applicants say creates a “statutory bar” preventing directors from representing a company once corporate rescue proceedings have been initiated.
RioZim, which is listed on the Zimbabwe Stock Exchange and owns several assets, including Renco Mine and Cam & Motor Mine, has consistently defended its financial situation.
The company maintains it is not insolvent and that the union’s move is a “frivolous and vexatious” abuse of the court process.
The union and the other two employees want the Supreme Court to set aside the High Court ruling and grant the corporate rescue order immediately.
Alternatively, they are requesting that the case be sent back to the High Court to be heard afresh before a different judge.
