Chinese Miner Removed From Gwampa Mining Deal Over Unauthorised Share Allotment

Chinese mining firm Ming Chang Sino Africa Investment has been removed from a Gwampa Mining investment agreement after the High Court ruled that shares issued to the company were unlawfully allotted.

Gwampa Mining approached the High Court to rectify its share register, arguing that the issuance and allotment of shares were illegal. Respondents in the case included Ming Chang Sino Africa Investment, Fuel Africa, Wang Ke, DGL Investment Number 5 (Pvt) Ltd, Eagle Italian Shoes, and the Chief Registrar of Companies and Other Business Entities.

High Court Commercial Division judge Justice Bongani Ndhlovu ruled in favour of Gwampa Mining, ordering the removal of Ming Chang Sino Africa Investment, Fuel Africa, and Wang Ke from the disputed agreement.

Gwampa Mining, incorporated in 2009, had entered an investment deal in April 2017 with Eagle Italian Shoes, Ming Chang Sino Africa Investment, and Fuel Africa to jointly mine claims owned by DGL Investment Number 5, with royalties payable to Gwampa.

The agreement was conditional on the assumption of a US$4.3 million debt and the execution of a shareholders’ agreement, with shares to be allotted only once these conditions were met.

The court found that shares were issued by DGL Investment Number 5, not Gwampa Mining, without a shareholders’ agreement, required capital contributions, or proper authorisation. Additional unauthorised shares were also allotted to Wang Ke, who was not a party to the agreement.

Gwampa argued that because the conditions precedent were never fulfilled, the agreement and any rights arising from it were void.

Ming Chang Sino Africa Investment claimed it had met its obligations, including paying the US$4.3 million debt and advancing a US$1.2 million loan, but failed to provide documentary evidence to support these claims.

Justice Ndhlovu ruled that Ming Chang Sino Africa Investment had not proven payment, backing Gwampa Mining’s assertion that the share allotment was unlawful.

Justice Ndhlovu noted that there was no evidence of royalty payments or a formal shareholders’ agreement, making the share allotment invalid.

The court ordered that the respondents’ names be removed from the company’s share register and that the disputed shares be cancelled. The Registrar of Companies and Other Business Entities was instructed to implement the changes.

In addition, the respondents were ordered to cover the legal costs of the case.

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