Asa Resources has been slapped with a $20 million lawsuit by a group of local investors, Zindico Consortium, for refusing to acknowledge a share purchase agreement signed in 2013 with the mining group, then known as Mwana Africa Plc.
The signed agreement gave Zindico Consortium the right to acquire 26% of Freda Rebecca, the local gold mining unit of the Alternative Investment Market listed mining group, which has assets in Zimbabwe, South Africa and the DRC.
The Chinese shareholders last year approved a change of name from Mwana Africa to Asa Resources, having earlier flexed their muscle by virtue of a controlling stake, to push out founding chief executive, Kalaa Mpinga.
Asa Resources is also the parent company of Zimbabwe Stock Exchange listed nickel miner, Bindura Nickel Corporation. The bulk of Asa’s revenue comes from its producing assets in Zimbabwe.
In the botched Freda Rebecca transaction, Zindico Consortium signed a sale and purchase agreement with Mwana Africa for the acquisition of a 26% stake in Zimbabwe’s second biggest gold miner.
But upon taking over, Asa executive chairman, Yat Hoi Ning, professed ignorance of the agreement saying he had never heard of Zindico Consortium. The indigenous partners have since decided to sue the Chinese shareholders.
“The indigenous partners signed a sale and purchase agreement with Mwana Africa for 26% of Freda Rebecca.
“When Asa took over, Ning, the current Asa executive chairman professed ignorance of the agreement and maintained that he had never heard of the indigenous partners.
This is despite the fact that Yat Hoi Ning and Yim Chiu Kwan were both directors of Mwana Africa at the time the agreement was reached,” reads excerpts of documents seen by The Herald Business.
The Zimbabwe indigenous partners with whom Mwana Africa agreed are suing for $20 million as the Chinese refused to acknowledge the agreement including (Yim Chiu) Kwan and (Yat Hoi) Ning who were Board Directors.”
According to the documents with details of the deal, in February 2012, Mr Kalaa Mpinga formally introduced Dr Chikanza, representing Zindico, as the official indigenous partner to the Ministry of Youth, Indigenisation and Economic Empowerment.
“Negotiations on the commercial terms, review of the various documents and the agreement that Zindico would purchase an effective 26% equity in FRGM were concluded and presented to authorities.”
The amount to be paid by Zindico was agreed on in December 2013 and copies of the agreement were submitted to Government with the responsible ministry being notified of the position.
The Herald Business is informed that Asa shareholders refused to meet or engage with the group of indigenous investors to discuss the issue despite numerous attempts in this regard.
Mr Mpinga was forced out of Mwana in June 2015, following a series of clashes with the Chinese majority shareholders and some minorities, a day after an extraordinary general meeting in London had also ousted his allies from the board.
China International Mining Group Corporation came on board in 2012 after injecting $21 million in the group meant to recapitalise Mwana Africa’s Bindura Nickel Corporation.
Asa Resources remains unindigenised and continues to hold controlling interests of 76% in BNC and 85% in Freda Rebecca Gold Mine. The Bindura Community Share Ownership Scheme share transfer allegedly remains uncompleted.