By Staff Reporter
Workers at Pan Reef Mine known as Indarama Mine in Kwekwe through the Zimbabwe Diamond Allied and Minerals Union of Zimbabwe (ZDAMWU) General Secretary Justice Chinhemahave applied for the company to be placed under corporate rescue arguing that the company is now insolvent as it is failing to service its debts.
Workers according to the application are said to be owed in excess of over US$1, 736, 151.23 in salary arrears since 2013 up to this year. Indarama Mine is also failing to service other statutory obligations.
“Indarama Mine is failing to service its debts including outstanding salaries and benefits since January 2013, terminal benefits to all employees whose contracts of employment were terminated; failure and/or negligence to pay MIPF, NSSA and NEC (mining industry)deductions from 2013 to date; and failure and/or negligence to pay Trade Union Fees,” he said.
At its peak the company used to employ 400 workers, but to date there are only 89 employees mainly surviving through gold panning.
The workers have since applied to the High Court seeking an order to place Indarama under corporate rescue proceedings in terms of section 121 of the Insolvency Act chapter 6:07.
Workers have suggested the appointment of Dr. Cecil Hondo Madondo of Stone House Consultants (Private) Limited as the interim corporate rescue practitioner in terms of section 131 of the Insolvency Act [Chapter6:07].
“The main purpose of this application is to seek the placement of the 1st Respondent (Indarama Mine) under the supervision of an appointed Corporate Rescue Practitioner in this case Dr. Cecil Hondo Madondo. We further seek an order of this court for the commencement of corporate rescue proceedings against 1st Respondent for the following purposthe temporary supervision of the 1st Respondent, and the management of its affairs, business and property, by a corporate rescue practitioner. A temporary moratorium (stay) on the rights of claimants against the 1st Respondent or in respect of property in its possession, the development and implementation, if approved, of a corporate rescue plan to rescue the 1st Respondent by restructuring its business, property, debt, affairs, other liabilities and equity,” Chinhema said in his application.
He added that corporate rescue will keep the company afloat and avoid liquidation and or winding operations totally.
“Currently the business is on a care and maintenance by the management who are suspected to be operating on a small scale siphoning the gold ore for their personal gains. It is therefore humbly submitted that the business is viable but what is lacking is proper management,” Chinhema said. Indarama has been on care and maintenance since January 2013.
Chinhema said, “It is therefore evidently that 1st Respondent is in financial dire straits. It is also evidently that while 1st Respondent is in financial dire straits, it could be operated on as a going concern if adequately capitalised.The poor performances are due to financial distress, gross undercapitalization and cash flow challenges.
“I have lost confidence in the shareholders of the company and its management. This feeling is shared by all the stakeholders and workers hence the present application,”
“The same retrenched workers are being evicted from the mine houses but are yet to be paid retrenchment packages. They do not have the financial resources to relocate to their homes. The same applies to employees who have reached retirement age. They are yet to be paid their retirement packages but are being evicted from mine houses without any financial resources to enable them to relocate to their homes,” Chinhema said.