By CHINOYI CHUPULU
Konkola Copper Mines (KCM) says the Court of Appeal has confirmed that the Provisional Liquidator (PL) of KCM Milingo Lungu will continue to operate and function as the Provisional Liquidator for KCM.
Mr Milingo’s powers as contained in the May 21, 2019 High Court Order are valid and have neither been curtailed nor vacated.
Further to this, any exercise of the said Provisional Liquidator powers since May 21, 2020 is within the law and Order of the High Court, which is the competent court for the Liquidation Proceedings.
This is contrary to some media speculation and aspersions that the Provisional Liquidator’s powers had been discharged or that they were curtailed.
In a statement made available, Mr Lungu said that the salient powers of the PL are to carry on the business of KCM so far as is necessary for the beneficial winding up of the Company and make any agreement on all questions in any way relating to or affecting the Company or its assets.
“Other duties amoung others are to take possession, custody and control of all the assets of KCM, dispose of assets by public tender or the most transparent manner under the circumstances and sell the real and personal property and things in action of KCM by public auction, public tender or private contract, ” he said.
He said in a ruling dated January 5, 2021, by Court of Appeal Judge President Fulgency Chisanga, the Court rejected the plea by Vedanta Resources Holdings Limited which sought to discharge the Provisional Liquidator.
“The Judge President in the ruling said the prayer to discharge the Provisional Liquidator had been brought up by Vedanta Resources Holdings Limited at the hearing of the Court of Appeal, without the respondents (ZCCM-IH) having any prior notice of the order and consequently did not address it. She further stated that the issue was never raised in the Court of Appeal decision of 20th November 2020, ” he said.
Mr Lungu said that Judge President Chisanga also said in the ruling that the notion by the appellant that a stay of liquidation proceedings automatically meant the discharge of the Provisional Liquidator did not sit well on the procedure to draw up the order by a single judge of the Court of Appeal.
“The ruling by the Court of Appeal confirms the legal position taken by the PL that the recent announcement to restructure and reorganize KCM into two separate companies, namely KCM SmelterCo Limited, and Konkola Mineral Resources Limited in a bid to increase efficiency and business opportunities, as well as asset and resource optimization, was within the law,”he said.
In managing the business, the Provisional Liquidator is entitled to adopt the business model that promotes efficiency and cost effectiveness.
“The business model so adopted is to disaggregate the company into mining and processing. This will prevent cross subsidisation between the units, “he said.
He stated that KCM has been insolvent for a long period hence the accumulation of debt to creditors and suppliers. The Shareholders have not provided funds to enable the company continue as a going concern.
“Under these circumstances, it is increasingly likely that the only option to fund the continued survival of KCM is through disposal of assets. The only other alternative is to cease operations,”he said.
Effective January 31, 2021, the new companies will begin to operate under the names, KCM SmelterCo Limited and Konkola Mineral Resources Limited, respectively with two separate Management structures and employee arrangements.
KCM SmelterCo Limited has been in existence since 2002 and has been a fully-owned KCM company, save it has been a dormant subsidiary.