SA firm loses Mbada asset claim

SA firm loses Mbada asset claim

Source: SA firm loses Mbada asset claim | The Financial Gazette June 8, 2017

A SOUTH African mining firm has lost its claim that some of its mining equipment was wrongly seized in a swoop on Mbada Diamond’s assets, which were attached to pay off the former Marange mining company’s debts.

Mbada’s assets were last year attached over a US$18 million debt owed to Pungwe Mining Company, but Genet Mining (Proprietary) Limited, a South African firm, which offered contract mining and beneficiation services to Mbada, claimed ownership of some of the equipment.
The equipment included a Bomag BW 2/12D-40 Roller, two drill rigs, a Volvo 150 KVA/TAD 720 GE containerised generator and two containers packed with a variety of items.

This prompted the Sheriff to approach the High Court seeking an order for the South African firm to show cause why the attached earthmoving equipment could not be auctioned.

Genet Mining claimed that it had temporarily imported the equipment in question between 2011 and 2012 for the purpose of fulfilling its contract with Mbada and produced supporting documents to support its claim. Among the documents produced in court were commercial invoices, South African customs declaration forms, Zimbabwe Revenue Authority (ZIMRA) bills of entry, photographs of the machinery and road freight manifest. These documents were dated between October 2011 and March 2012.

However, Pungwe Mining vehemently disputed the claim by Genet Mining on the basis that a closer scrutiny of the documents produced showed that the South African firm had imported the equipment on behalf of Mbada, thereby making them liable to judicial attachment.

Pungwe pointed out that according to ZIMRA regulations, when someone imports something into Zimbabwe on a temporary basis, a commercial invoice is not required. A commercial invoice is required only where the goods are being imported into Zimbabwe permanently.

The fact that there was an invoice showed that the equipment had not been imported for temporary use in Zimbabwe as claimed by Genet Mining, Pungwe countered.

Pungwe Mining also argued that if the equipment had been imported on a temporary basis, Genet Mining should have attached to its papers a ZIMRA document titled: “Application for Temporary Import Privileges (ATIP).”
It further pointed out that a temporary import permit was only valid for one year and the absence of proof of any application for renewal of the permit, despite the equipment having been imported in 2011, was proof that it had been brought into the country for use by Mbada permanently.

Further scrutiny of the documents showed that for the roller, the exporter was given as Gecko Mining (Genet Mining’s previous name) and the importer was given as Condurango Investments trading as Mbada Diamonds.
There was also a supporting affidavit by a Zimbabwean clearing agent whose evidence was that the documents filed by Genet Mining showed that the equipment was imported permanently into Zimbabwe.
The customs code that had been used to clear the equipment with ZIMRA also showed that the equipment had been granted a tax rebate, a status that only Mbada enjoyed.
In the end, the court agreed that the South African firm had not been able to prove that the equipment in dispute belonged to it and not to Mbada.

“The code 4000484 is a customs procedure code for goods imported for the purposes of mining operations that have been granted a rebate. Such a rebate is a special privilege granted only to approved Zimbabwean organisations. Mbada Diamonds is such an organisation, which would have qualified for the privilege, not the claimant (Genet Mining),” said Justice Charles Hungwe in his judgement.

“It (the equipment) belongs to the debtor (Mbada). The absence of an ATIP document confirms this, as does the absence of an application for renewal of a temporary import permit for the equipment. In the result, I am of the view that the claimant has not discharged the onus on it to prove ownership or possession of the equipment such as to render it not executable. The claimant’s claim is therefore dismissed,” Hungwe ruled.

The sheriff has, since last year, been selling various assets belonging to Mbada—including a light aircraft—in order to pay off more than 200 creditors owed more than US$35 million by the diamond mining concern.

COMMENTS

WORDPRESS: 1
  • comment-avatar
    spiralx 6 months

    Greed and stupidity all round, it seems.