….Clears salary arrears at 1:1
….New investors accused of negotiating in bad faith
One of the country’s biggest gold producers, Metallon Gold Zimbabwe has courted the ire of employees after settling salary arrears in local currency at the rate of 1:1.
The arrears, which run into millions, accrued during the time when the mining group’s mining assets were put under care and maintenance two years ago due to various operational challenges.
It also occurred when the economy was using a multi-currency regime dominated by the United States dollar.
The multi-currency regime was discarded in June last year in favour of the Zimbabwe dollar.
The latest move by the mining group is said to be in line with the Supreme Court judgment in the case of Zambezi Gas Zimbabwe (Private) Limited v N.R. Barber (Private) Limited which declared that a debt owed in United States dollar which was incurred on or before February 22, 2019, should be discharged in local currency at 1:1.
This means that a company that owed US$1m is now compelled to pay ZWL$1m.
Metallon has four mines under its portfolio — How Mine, Mazowe, Shamva and Redwing.
Its fifth mine, Arcturus Mine, was sold to businessman Tawanda Nyambirai.
A well-placed source to the developments told Business Times that Metallon employees were paid last week for all their outstanding arrears.
“Employees just woke up to the shock of seeing all their arrears cleared but on 1:1, something which has caused an outcry among employees.
This came as shock as the negotiations between Mzi Khumalo and the investor were veiled in secrecy,” said the source.
Information at hand say the investor linked to business tycoon Kudakwashe Tagwireyi has already fulfilled payments to Khumalo in foreign currency culminating in the takeover of Shamva, Mazowe and Redwing mines despite the awarding of a rescue plan for the mining group by the High Court.
Metallon Corporation legal representative George Gapu of Scanlen and Holderness recently told Business Times that there were discussions currently happening to “settle the matter amicably and out of court”.
Employees have also been riled by the fact that the investor went on to make payments to Metallon owner Khumalo before taking into consideration, the concerns of the wideranging creditor’s constituency.
It is understood that the newly appointed judicial manager Reggie Saruchera of Grant Thornton Zimbabwe is unhappy by the arrangement made between the investor and the gold miner’s shareholders.
Khumalo had not responded to written questions by yesterday.
The High Court recently placed Metallon’s Mazowe and Shamva mines under administration after granting an application by Associated Mine Workers Union of Zimbabwe for a reconstruction order of the two mines.
Metallon, however, appealed to the Supreme Court against the High Court ruling.
The gold miner has been facing challenges after hitting a new low amid revelations the gold mining group has been suffering neglect from its shareholder, a situation that is affecting productivity at the gold mining group culminating in multiple job losses at the group’s two Mashonaland Central-based units.
The problems at the gold producer have seen a turnover of senior managers which saw former chief executive Kenneth Mekani leaving the company.
The gold mining group has also been battling allegations of externalising over US$30m through dividends paid to shareholders without profits to back them and fictitious external loan payments.