Hwange case takes new twist

HARARE - Listed Hwange Colliery Company Limited (HCCL) has accused its coal gasification joint venture Chinese partner, Taiyuan Sanxing Economic and Trade Company Limited (TSETC), of mismanagement and externalisation of funds.

HCCL, which holds a 25 percent shareholding in Hwange Coal Gasification Company (HCGC), said actions by TSETC — holding the remaining 75 percent stake — “have caused the disruption of the smooth functioning of the investment.”

Thembelami Ncube, HCCL company secretary, on Sunday said it was agreed at an annual general meeting (AGM) in April that “Guo Feng, managing director of HCGC and Su Longmin, the marketing manager, be suspended pending disciplinary hearing on various grounds of mismanagement, including misappropriation of resources of the company to the detriment of shareholders.”

Ncube noted that at the AGM, Leo Mugabe was appointed as an alternate director to Gilbert Chahwanda of TSETC.

On Sunday, TSETC called for an extra ordinary general meeting (EGM) to be held later this month in China to deliberate the outcomes of the April AGM and reconstitution of HCGC’s board.

The EGM is also expected to tackle proposed changes to HCGC’s partnership agreement.

HCCL is seeking to restructure the built-own-operate and transfer (Boot) arrangement with TSETC into a 50-50 joint venture.

Ncube said the restructuring could be “a permanent solution to the challenges at HCGC and the dispute relating to the value of the investment.”

This comes after the Chinese company had accused Mugabe of elbowing them out of the coal gasification deal.

Last week, Mugabe was ordered by the High Court to surrender TSETC’s Harare CBD premises he had illegally seized.

Early this month, he reportedly took over the offices along Nelson Mandela Avenue and ordered all of the firm’s employees to vacate.

Mugabe then allegedly secured the office with new locks, stating he wanted to appoint new management at the company.

HCCL entered into a Boot agreement with TSETC in 2007.

Under the deal, the Chinese partners were supposed to set up a coke oven battery with an annual capacity of 300 000 tonnes while HCCL’s contribution to the investment was to provide coking coal at a subsidised price.

However, the business relationship got strained, with the coal mining giant accusing its partners for failing to honour some of their contractual obligations.

“Forensic auditors appointed to carry out an investigation into the operations of Hwange Coal Gasification Company, to date have established that there was mismanagement and there have been massive externalisation of funds,” said Ncube. - John Kachembere

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