Minority shareholder insists ZCCM-IH pursues fishy sale of KCM to Vedanta

By GRACE CHAILE-LESOETSAA MINORITY shareholder in ZCCM-IH has insisted that the investments holding company was a shareholder in KCM and has the standing to sue all the intended defendants for losses it suffered as a result of the sale of the mine to Vedanta Resources Plc.Mr Dennis Mumba has also insisted that he is legally eligible to commence derivative action on behalf of ZCCM-IH being a minority shareholder in the company.This is in a case where Mr Mumba has filed a notice of motion seeking leave to commence a derivative action filed in the Lusaka High Court on August 20, this year.Mr Mumba wants to challenge the alleged fraudulent sale of KCM to Vedanta Resources Plc.Mr Mumba stated that directors of KCM breached their duty of care when they made an offer of 560,325,511 shares that shifted control of KCM to Vedanta Resources at a bargain price of US$ 0.0446169 per share where Vedanta only paid US$25million of US$2.909billion that KCM should have received for its shares.He stated that KCM loss of US$2.884 billion marked the genesis of the mine’s financial problems.Mr Mumba has cited Zambia Consolidated Copper Mines Investments Holdings (ZCCM-IH ) as the respond-ent while Zambia Copper Investments Limited ( ZCL), Vedanta Resources plc, Milingo Lungu as provisional liquidator of KCM and Konkola Copper Mines ( in liquidation) as defendants in the matter.However, ZCCM-IH filed an application asking the Court to dismiss or set aside the matter on a point of law.Mr Lombe Mbalasha, counsel for ZCCM-IH, contended that the action contemplated by Mr Mumba is not a derivative action and even if it were to be argued, the applicant (Mr Mumba) is not eligible to commence such an action.Mr Mbalasha said ZCCM-IH stated that Mr Mumba’s application does not satisfy Order 53 of the High court rules as it was filed without the requisite skeleton arguments and thus offends the court’s rules.He applied that the matter be dimissed.In an affidavit in opposition to ZCCM-IH’s summons to raise preliminary issues to dismiss the matter on point of law, Mr Mumba, through his lawyer Mwape Moono, insisted that the matter is correctly before court.Mr Moono said ZCCM-IH was a share holder in KCM and by virtue thereof has standing to sue all the intend-ed defendants for losses it suffered as a result of this transaction.“Being a shareholder, ZCCM-IH suffered losses as a result of fraudulent transaction that transfered corporate control of KCM to Vendata Resources plc,” he said.Mr Moono said Mr Lungu is not a nominal party but will be an actual substantive defendant once the writ of summons is filed and this averment proves that ZCCM-IH agrees with Mr Mumba in this respect.He said ZCCM-IH is correctly cited as the company on whose behalf the derivative action is taken and must be a nominal defendant to the proceedings.Mr Moono said the skeleton arguements are not required when filing originating process in the commercial regis-try that in fact they are only required for interlocutory or intermediate stages.He stated that the court has power to order any deficiency to be rectified.Mr Moono said the court has power to order that an affividavit be re-sworn and that not prejudice will be oc-casioned to ZCCM-IH.The Court is sheduled to hear the matter today.