Vumbachikwe mine clashes with creditors

Vubachikwe Mine reportedly owes various creditors, including workers, the Zimbabwe Revenue Authority and Zesa Holdings more than US$10 million.

THE owners of Vumbachikwe Mine situated in Gwanda, Matabeleland South are at loggerheads with creditors amid accusations from the latter that the management is cobbling up conspiracy theories to avoid clearing the company’s debts.Some Vumbachikwe Mine creditors are now pushing for the company to be placed under corporate rescue, claiming the firm was heading towards insolvency.Vumbachikwe Mine reportedly owes various creditors, including workers, the Zimbabwe Revenue Authority and Zesa Holdings more than US$10 million.The mine’s owner, Forbes & Thompson (Bulawayo) (Private) Limited, recently filed an affidavit opposing an application submitted by one of its creditors, Fawcett Security Operations, to place the mine under corporate rescue.Vubachikwe alleged that the application for corporate rescue is part of a conspiracy orchestrated by Benjamin Turney, the chief executive of Kavango Resources PLC, a UK-based mining company.The affidavit claimed that Turney, along with former Duration Gold senior managers, Marida van der Spuy and Rob Forfar, are attempting to pressure Vubachikwe’s Managing Director to sell the mine at a low price.Vubachikwe claimed that the application by Fawcett Security, a creditor owed US$170 000 for security services, is a front for this alleged conspiracy.However, Priscillar Gustavo of Masamvu and DaSilva-Law Chambers, who is representing Fawcett Security Operations, dismissed the claims of a hostile takeover attempt.In its founding affidavit, Fawcett said it has provided private security services on contract to Vumbachikwe over the past approximately 10 years.Andy Laing, the managing director Fawcett, said claims of a conspiracy theory are a cover up by the Vumbachikwe mine management to avoid paying the debt“The  conspiracy theory is unhelpful to the 1st (Vumbachikwe)respondent as it does not controvert the pleaded cause of action namely that the 1st respondent is financially distressed and that it has failed to pay its debts to its creditors as they fell due and therefore  is a reasonable prospect of rescuing the 1st respondent,” he submitted through his lawyers.“It is not clear what the deponent understands a "hostile takeover" of a company to mean.“Suffice to point out that corporate rescue proceedings are a statutory process with no room for hidden agendas such as the conspiracy theory of a hostile takeover being peddled by the deportment.“There can be no hostile takeover of the shares owned by shareholders of the 1st respondent through corporate rescue proceedings; the conspiracy theory is far-fetched and hollow.”He added: “The applicant is advised, which advice it accepts to be correct, that the question of when  corporate rescue commences, and the consequences of such commencement, is very clear in the provisions of the Insolvency Act and has been settled by the supreme court in its interpretation of those provisions.“There is therefore no room for the deponent to argue a different position.”There are media reports that the Gold miner is also under fire for hoarding Exclusive Prospecting Orders (EPO), denying the country an opportunity to develop valuable goldfields through modern exploration.Vumbachikwe has not been operating since November 2022 after workers downed tools over outstanding salaries and poor working conditions, among other issues.Its parent company, Duration Gold Zimbabwe, owes creditors over US$10 million, and the monthly debt increase is estimated at US$250 000 with no strategy to service it.

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