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Mining company bosses face civil prisoner proceedings

BUSINESSMAN Muganyizi Lutagwaba has filed an application for arrest and detention, as civil prisoners, two senior officials with Mining Company, KM Prospecting Limited, Rajendra Shah and Sylivia Mushi, for disobeying court’s decree for 943m/- in a deal involving sale of shares.

According to the application, Mr Shah is the director with the company, while Ms Mushi is indicated as the Acting Director and company Secretary. The application filed before the High Court’s Commercial Division in Dar es Salaam on June 5, 2018 is part of execution of the decree dated January 28, 2016.

Such decree was issued in a commercial case by Judge Agathon Nchimbi in favour of Mr Lutagwaba, the applicant and two others businessmen. It is alleged that the company involved in the sale of shares is Douglas Lake Minerals Limited, whose name was changed to Handeni Gold Inc.

Court records show that the three decree holders, Mr Lutagwaba, Eric Mshauri and Charles Mgweo filed the suit against KM Prospecting Limited, who is among the judgment debtors, claiming for payments of an outstanding amount in the sum of USD 428,750, US dollar 100,000 and US dollar 70,000, respectively.

After evidence was tendered at trial by the parties, on January 28, 2016; the court delivered its decision in favour of the three decree holders for realisation of the whole amounts claimed with costs. The application shows that, as up todate, no appeal has been filed by judgment debtors jointly and severally.

During the hearing, the businessman had told the court that he amassed a total of 2, 450,000 shares fully paid and non assessable common shares with a par value of 001 US dollar per share of Douglas Lake Minerals Inc, which later on changed its name to be Handeni Gold Inc.

In the course of time, he sought to sell the shares and for several times while in conversation with Dr Dalay Kafumu, he mentioned his intention to dispose of all his shares in the company, where Dr Kafumu informed him later that Dr Reginald Mengi was interested in buying his shares.

According to the evidence, the agreed purchase price was fixed at US dollars 0.35 per share, hence the total purchase price payable for 2,450,000 shares was 857,500 US dollars and it was agreed that half of the purchase price of 428,750 US dollars was to be paid upfront by the buyer.

It was stated further that the balance in the same amount became due and payable on completion date, which was December 31, 2011 as per the sale of share agreement. It is further alleged that the purchased shares were registered in the KM Prospecting Limited.

According to the judgment, having considered the pleadings, exhibits and testimonies laid down in the court, Judge Nchimbi found that it was an undisputed fact that KM Prospecting Limited had paid only half of the purchase price of the shares involved.

“From the totality of the evidence, I would order the defendants to pay the plaintiffs the outstanding balance of the purchase prices from the sale of shares in the sum of 428,750 US dollars, 100,000 US dollars and 70,000 US dollars, respectively,” he declared.

The judge had further ordered the plaintiffs to surrender the original certificates of shares to KM Prospecting Limited to enable the latter to pay the outstanding balance of the purchase price.

THE International Commercial Bank (ICB) ...

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Author: FAUSTINE KAPAMA

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