By Staff Reporter
EFFORTS by Redwing Mining company employees to have the mine put under corporate rescue have flopped after the High Court ruled that they did not meet the requirements for this action.
The employees are Peter Zheke, Victor Zivanai and Peter Chirakaraka.
They made a High Court application last year citing Redwing Mining Company (Private) Limited, Master of the High Court and the Registrar of company as respondents.
The application was in terms of s 121 as read with ss 124 and 131 of the Insolvency Act.
On 23 July 2020, Redwing was placed under corporate rescue proceedings by the High Court.
On 5 September 2022, the Supreme Court under case number SC 96/22 set aside the High Court order because each affected person was not served with a standard notice as required in section 124 of the Insolvency Act.
The Supreme Court also ruled that the trade union that represented the employees had no locus standi to bring the proceedings before the court.
However, the applicants filed the present application alleging that Redwing is in financial distress but also capable of being revived by corporate rescue.
They submitted they were creditors of Redwing in that they were owed salaries.
In opposition, Redwing ring-fenced itself with six preliminary points.
Among other things, the mine argued that failure to serve all affected parties by standard notice is fatal to the application.
“The onus is on the applicants to show that they have complied with s 124.
“The applicants failed to discharge the onus upon them. They admitted having served some of the affected persons but said they were yet to serve others.”
Redwing also argued that the debts upon which the applicants claim to be affected persons have been prescribed as they dated back to 2018 and there was no interruption of prescription.
The mine’s lawyer Advocate Thabani Mpofu argued that the putative corporate rescue proceedings could not interrupt prescription because they were a nullity.
High Court judge, Justice Jacob Manzunzu upheld the opposition’s arguments ruling that the truth of the matter is that the applicants failed to comply with the strict provisions of the Act.
“This preliminary point has no merit. This is because, it was argued, the applicants’ alleged debts arose during corporate rescue when the running of Redwing was not in the hands of management.
“The applicants did not disclose in their application the removal of Hofisi as a corporate rescue practitioner. Neither was there any mention of the tribute agreement with Betterbrands Mining.
“The applicants were aware of the cash injection of US$973.223.59 disclosed at a meeting in which they participated. This information is relevant in the determination of their application.
“I agree with Mr Mpofu that the application at hand is fact-based. As a result, the applicants had a duty to disclose all the facts of the matter to aid the court in coming to a conclusion.
“The only successful preliminary points are non-compliance with statutory provisions and material non-disclosure. These warrant the dismissal of the application. The first respondent has not justified why costs should be punitive,” said the judge before dismissing the application.