The Kabwe High Court prevented Zamsort Limited and Handa Resources Limited from transferring ownership of the property rights in the Kalaba mining operation from Terra Metals Limited to another investor.
This complies with an interim ex parte injunction order to prevent the alienation of property and the appointment of a receiver pending the ruling of Judge Kelvin Limbani on the case granted to Terra Metals limited shareholders Mumena Mushinge and Brian Chisala .
“It is hereby ordered and ordered that Zamsort Limited and Handa Resources Limited, whether by themselves, their servants or agents, whoever they are and are hereby prohibited from disposing, disposing or encumbering in any way tenants and mining assets known as the Kalaba Mine under Small Large Scale Mining License Number 8224-HQ-SML and Large Scale Exploration License Number 19906-HQ- LEL until the final decision of this case or a new court order, ”said Judge Limbani.
“It is further ordered and hereby ordered that Mwenya Mukuka be and is hereby appointed receiver of said mining lands to manage and preserve until further notice of this court. “
According to the criminal opinion, if Zamsort limited and Handa Resources Limited, whether by themselves, servants or agents chose to disobey the court order in any way, they would be liable to contempt of court. court and imprisonment on conviction.
In this case, Terra Metals Limited and its shareholders sued Zamsort Limited and Handa Resources Limited, demanding payment of US $ 5,889,407 in respect of their shares sold to another investor.
According to a statement filed with the Kabwe High Court, the plaintiffs, Terra Metals Limited, Mushinge and Chisala, who were shareholders, demand payment of $ 5,889,407 or, failing payment, full restitution of their ordinary 53%. fully paid shares of Zamsort Limited which have been allocated to new shareholders.
The complainants stated that in 2015 Terra Metals held 4,950,000 shares in Zamsort Limited.
The plaintiffs said that around the same time, Chisala had 500 shares of Terra Metals while Mushinge had 4,300.
They stated that at the material time the defendant held a small-scale mining license number 8248-HQ-SML and a mining prospecting license 19906-HQ-LPL relating to a mining fund. commonly known as the Kalaba mine in the North West Province.
The plaintiffs said the Kalaba mine was still of good mineralization and bankable and therefore attractive and attractive to mining investors.
The plaintiffs stated that from 2014 to 2015, Zamsort limited encountered financial and operational difficulties during which its shareholders agreed and decided to raise capital by borrowing in the financial markets or by selling their shares to potential and voluntary external investors. .
“Plaintiffs who are pursuing the defendant’s program to raise capital mentioned above have asked its then chairman, Robert Penny, to identify and engage companies and individuals who would be interested in investing in the defendant by the through the outright purchase of shares / or the provision of lines of credit or loans. Said president in turn, among others, called on the services of a certain Fiona Penny to solicit and attract such an investment in the defendant company, ”the statement further indicates.
The plaintiffs added that around February 2015, an outside company called Ortac Resources Limited (ORL) was introduced to them as a potential investor in the defendant company.
The plaintiffs stated that by letter dated March 27, 2015 from ORL to Zamsort Limited and Terra Metals, an exclusivity agreement was reached between the parties.
“As a result of said exclusivity agreement, the defendant and ORL entered into and signed on or about March 30, 2015 a call option agreement whereby the defendant issued guaranteed convertible loan notes in the aggregate amount of US $ 600,000 to ENT, ”they said.
The plaintiffs added that in the second option purchase agreement, only $ 394,000 was advanced to the defendant.
“The plaintiffs admit that the convertible loan notes were essentially a percentage of their shares in Zamsort pledged as collateral in ORL, for the repayment of the sums advanced to Zamsort,” they said.
The complainants added that this was a condition of the purchase option agreements that, upon the exercise by ORL of its conversion option, the loan notes under the agreements would respectively be converted. in 10.7 percent and 8.6 percent of the fully paid ordinary shares of the defendant company.
They further stated that the conversion would mean that ORL would acquire 19.34 percent of the fully paid common shares of the defendant, owned by the plaintiffs.
The plaintiffs submit that the conversion for all practical purposes was legally and effectively a sale of said shares by them to ORL for the consideration of $ 900,000.
They further explained that due to the necessary recapitalization of the defendant company and in accordance with the exclusivity agreements, the consideration for the purchase of their shares was not paid to them but was invested in Zamsort.
“At the time, it had been agreed that the said purchase consideration had to be repaid in due time to the plaintiffs as owners of the shares which were sold and transferred to ORL, by means of convertible loan notes”, indicates further demand.
And the plaintiff said that a second investor, Kopara Investments Limited, had been identified and presented to the shareholders and directors of Zamsort for the purpose of buying shares or shares of the defendant company.
The complainants stated that Kopara, through its entities and associates, Bay Bridge Trading, Supa Properties, AV Marketing and Distributors and Patel Arunbbai between June 21, 2015 and October 11, 2016, made various investment payments in operations and for other purposes of the defendant. the business totaling $ 4,320,000.00.
It was stated that a third investor came on board with $ 575,407 and due to the sale of shares by the plaintiffs a total of $ 5,889,407.00 was paid directly to the defendant or invested in his various purposes and none of that money was paid to the plaintiffs as owners of the shares that were sold or diluted.
The plaintiffs said it was discussed and agreed with Penny that Zamsort would pay the plaintiffs all money received from investors and invested in the defendant company.
They added that they started demanding payment in 2018, but the defendant did not pay them.
The plaintiffs said that Zamsort and its new shareholders have unjustly enriched themselves.
Mushinge and Chisala also demand the payment of interest on monies, interlocutory orders for the preservation of the defendants’ mining properties, costs and any other remedies that the court may deem appropriate.
There is a dispute, submitted to arbitration, between the Zambia Mineral Exchange Corporation, Terra Metals, Mumena Mushinge and Brian Chisala and Zamsort Limited, Handa Resources and Afgrimin Resources arising from a lease entered into on August 4, 2020 in which Zamsort leased at Zamex a processing plant, all factories, mining equipment and machinery of its Kalaba mine in Mwinilunga under small-scale license n ° 8248-HQ-SML and small-scale exploration license n ° 23243-HQ-SEL.
Terra Metals, Mushinge and Chisala further criticized Zamsort, Handa and Affrimin for the failure of the 1st defendant to pay US $ 5,889,407.00 for the shares sold or transferred to Handa Resources.
Handa, a brand new company, was incorporated on November 4, 2020 and has as shareholders and directors such individuals as the former ZAF commander, General Sunday Kayumba and entities such as Arc Minerals and Kopara Investments whose legal owner of the two companies is Nicholas Von Schirnding.
It is reported that Zamsort, in collusion, conspired to deny Zamex and others the profit after they ceded ownership of their mining concessions on licenses # 8248-HQ-SEL, 23213-HQ-SEL and 19906- HQ-LPL.
In 2014, Zamsort obtained a large-scale exploration permit No. 1990 covering approximately 100,000 hectares and, as required by law, after four years of the permit, it had to cede 50% of these 100,000 hectares and their exploration.
In 2018, Zamsort legally ceded 50 percent of the 100,000 hectares of which the building was subsequently acquired by ZACO Ltd, a company owned by Super Properties Ltd and UNICO Properties Ltd, and has as directors Mr. Nicholas Von Schirnding again and Rajendra Patel.
ZAMSORT Ltd has also obtained Small Scale Mining License No.8248-HQ-SML and another Small Scale Exploration License No.23243-HQ-SEL in the remaining part of the area held under License No ° 19906-HQ-LPL.
And in 2020, ZAMSORT was required by law to return 50 percent of the remaining batch of license # 19906-HQ-LPL and upon surrender, AFRIMIN applied and subsequently acquired license # 28700 -HQ-LEL being the rest of the portion.
This was done despite a pending application from Central African Resources (CARE) Limited.
In 2021, ZAMSORT, then owner of a quarter of the Land previously covered by license n ° 19906-HQ-LPL, abandoned licenses n ° 8248-HQ-SML and 23443-HQ-SEL, which led them to be part of the remaining part of n ° 19906-HQ-LPL.
ZAMSORT then caused a change in the data regarding No. 19906-HQ-LPL to be registered as belonging to the 2nd defendant (HANDA Resources LTD).
The abandonment of permit No. 8248-HQ-SML should have resulted in its offer to Cupriferous Resources Ltd, a company which had a pending application on said abandoned permit.
As a result, the 100,000 hectares of land previously covered by No. 19906-HQ-LPL is 50 percent owned by ZACO while AFRIMIN owns 25 percent and the remaining 25 percent is owned by Handa, actions deemed illegal. and irregular, as ZACO’s claim for the 50 percent portion returned by ZAMSORT should have been subject to the hierarchical order in which the claims were considered at the time of filing.
All this was done with full knowledge of some of the staff of the Ministry of Mines of the previous administration.
In addition, Von Schirnding and Patel are the majority owners of ZACO and ZAMSORT LTD and even if on paper there has been a divestiture, the beneficiaries remain the same.
In addition, the AFRIMIN request for the part ceded by ZAMSORT in 2020 should have been submitted to the pecking order system but was not as there was a Cupriferous request placed forward by AFRIMIN.
Sources close to the transaction say the action allowed the transfer of ownership without tax compliance or regulatory consent.
“The objective of this illegal and non-procedural maneuver was to deprive ZAMSORT LTD of its economic value so that it would be unable to meet its obligations to the persons owed for the shares sold in the company or to satisfy its judgment debts”, said a source. .