RioZim shareholder moves to overturn disputed EGM resolutions

STAFF WRITER
A shareholder in RioZim Limited has approached the High Court seeking to nullify resolutions passed at the company’s recent Extraordinary General Meeting (EGM), alleging serious breaches of insolvency laws and corporate governance procedures.
In a founding affidavit filed last week, minority shareholder Tendai Rwodzi argues that the EGM held on April 22, 2026, was legally invalid because it proceeded after the company had allegedly entered a mandatory legal “freeze” triggered by a corporate rescue application.
Rwodzi told the court that he filed for corporate rescue on April 21, citing insolvency concerns, a move he says immediately activated a statutory moratorium under Zimbabwean law.
The moratorium, he argues, acts as a legal shield that suspends legal proceedings and the disposal of company assets pending the appointment of a rescue practitioner, with the intention of preventing a distressed company from being stripped of strategic assets.
“The dissipation of the company’s assets affects 1,651 shareholders, several creditors and employees,” the affidavit reads.
Rwodzi further warned that unless the court intervenes, the company risks suffering “irreparable damage”.
Beyond the insolvency dispute, the application also raises several procedural objections which, according to the shareholder, render the EGM resolutions null and void.
Rwodzi alleges that the notice convening the EGM was signed on March 30 by Allan Murimirwa, whose appointment as company secretary was reportedly only due to take effect on May 1, 2026.
He also argues that the company failed to comply with provisions of the Companies and Other Business Entities (COBE) Act, which requires a 28-day special notice period for the resolutions that were tabled at the meeting.
The application further accuses RioZim of failing to publish audited financial statements for the year ended December 2025 and neglecting to issue a cautionary statement relating to the forfeiture of the Sengwa Mine project, one of the country’s largest proposed thermal power developments.
At the contested EGM, shareholders approved the disposal of several strategic mining assets as the company seeks to unlock liquidity.
The approved transactions include the sale of Mtandahwe Copper and Tungsten for a minimum consideration of US$3 million, as well as the disposal of One-Step Gold Mine for US$1 million, subject to a price adjustment mechanism.
Under the terms of the agreement, the purchase consideration could increase if proven in-situ gold reserves exceed 400 kilogrammes. However, the prospective buyer retains the option to withdraw should the mineral resources prove commercially unviable.
Shareholders also ratified the US$1,6 million sale of a subsidiary-owned property in Msasa and authorised the disposal of additional non-core properties located in Nyanga and Newlands.
The EGM further approved plans for the company to secure a future loan facility of up to US$35m.
The proposed borrowing is expected to be secured against company assets of equivalent value, with directors granted discretion to determine the specific financing terms.
In a cautionary statement, RioZim confirmed that it had received the latest court application and would file opposing papers in defence of the company’s position.
The mining group said a similar application brought by a workers’ union in 2025 had already been dismissed by both the High Court and the Supreme Court.
According to the company, its legal advisers remain confident of a favourable outcome, citing what they described as the same technical and substantive weaknesses that undermined previous litigation against the group.