A SHAREHOLDER in Kingphar Company Zambia Limited has complained to Chief Justice Ireen Mambilima about the questionable way in which the firm was placed under liquidation by the Kabwe High Court, which also appointed Lusaka lawyer Lewis Mosho as its business rescue administrator.
In a letter dated May 15, 2020, Wenxiu Pan, director at Bumu General Trading FZE which is a shareholder in Kingphar, has highlighted a lot of questionable activities that took place before such a decision was reached.
In the letter copied to the judge in charge at Kabwe High Court, Anti-Corruption Commission director general, and President Edgar Lungu’s legal advisor, Wenxiu is seeking justice Mambilima’s intervention in the matter where he feels that justice has been subverted.
“Dear Madam, Complaint over cause No. 2020/HB/015- Youjun Zhuang and Wang Qinghai vs. Kingphar Company Zambia Limited. Bumu General Trading FZE is a shareholder in Kingphar Company Limited and please note our interest. We write to complain about the goings on in the above-mentioned matter,” Wenxiu states. “The matter was ostensibly commenced by one Youjun Zhuang on 23rd March 2020 in Kabwe seeking an order to place Kingphar Company Ltd under Supervision and Business Rescue. The basis of his claim was a purported assignment of a debt of US $50,000.00 to him by Wang Qinghai who claimed to be owed US $1,700,000.00 by Kingphar Ltd.’’
He explains that Quinghai had earlier on commenced another matter where he claimed to have been owed $1.7 million.
“Prior to the commencement of the above-mentioned action, the said Wand Quinghai had also commenced an action under cause number 2018/HPC/0437 before Madam Justice I. Z. Mbewe claiming to be owed a sum of US$1,700,000.00 by Kingphar Ltd. His lawyers in this matter were PNP Advocates and Keith Mweemba Advocates,” he states further. “On 18th December 2018, Judge Mbewe delivered a ruling in which she held that the document that Mr Quinghai was relying on as proof of the debt could be not used in the proceedings for inter alia, not being an authenticated document and most importantly, it was a purported transfer from the plaintiff to some other entity and not Kingphar Ltd.”
Wenxiu states that after receiving unfavourable ruling, Quinghai used the same document rejected by the court to commence winding up proceedings against Kingphar Limited before judge Edward Musona in another court.
He states that it was judge Musona who appointed Mosho as provisional liquidator despite strong opposition from shareholders and other interested parties.
“Upon receipt of this ruling, his lawyers and him discontinued the case and went and commenced winding up proceedings before the Honourable Judge Musona under cause No. 2020/HPC/165 again relying on the same document,” Wenxiu explains. “In this action, Judge Musona proceeded to appoint Mr Lewis Chisanga Mosho as Provisional Liquidator of Kingfar Ltd. Several affected and interested parties filed notices of objection to these proceedings which were never heard by the court for reasons to be explained below. Another matter was commenced by Kingphar Ltd under cause number no. 2020/HPC/268 seeking to have an order placing Kingphar Ltd in Supervision and Business Rescue before Judge Dr. W.S. Mwenda. This matter was dismissed on a preliminary issue for reasons given below…”
And Wenxiu detailed how his fellow Chinese, Youjun Zhuang, in collusion with Qinghai, managed to sue Kingphar Limited under a cause number that had been used before in a different matter.
“Upon noticing that these proceedings in 2020/HPC/268 were afoot, another action was commenced by Mr Youjun Zhuang in Kabwe purportedly under cause number 2020/HB/015 on 23rd March 2020. Curiously, in the civil case register at Kabwe High Court, the case of Mr Qinghai has the cause number 2020/HB/012 and that cause no. 2020/HB/015 is actually a matter by Malian Mumba as administrator of the estate of Rodgers Bwalya filed on 24thMarch 2020 for an order to sell a house,” he states. “Yet presently, Mr Qinghai’s case is now using the cause no 2020/HB/015 which is for a matter that was already disposed of. There was also another matter bearing the same cause number 2020/HB/012 between Ireen C. Banda vs Haggai Kapembwa and others filed on 18th March 2020.’’
To elaborate his point further, Wenxiu detailed the sequence of numbering in the court register in Kabwe.
“The sequence of the numbering in the register shows that there is: 2020/HB/11 filed on 16th March 2020 between Jane Mwewa and Zwere International; 2020/HB/012 filed on 23rd March 2020 between Youjun Qinghai and Kingphar; 2020/HB/012 filed on 18th March 2020 between Helen Banda and Haggai Kapembwa,” he states.
“2020/HB/013 filed on 18th March 2020 between Zumanana Food Trading & Dorothy Henne 2020/HB/014 filed on 23rd March 2020 between Ardhi Planners ltd vs. Rephidim Institute Ltd. 2020/HB/015 filed on 24th March 2020 being an Application by Malian Mumba in estate of late Rodgers Bwalya.”
Wenxiu explains that going by the above details, it showed that there was something fishy about how the Kingphar case was filed.
“My Lady, what immediately jumps out is that there is something fishy and strange about the two 2020/HB/012. The one for Mr Qinghai was actually squeezed into the space left at the end of the page and this is the first time that we have seen dates entered in this manner,” he states further. “We have no choice but to conclude that there was some mischief or something fishy about the way the case against Kingphar was filed more so that it was used to raise a preliminary issue in the cause no. 2020/HPC/268 claiming that it was filed earlier and therefore 2020/HPC/268 ought to be dismissed. We have attached a copy of the register as well as the case allocation page for ease of reference.”
He explains that government had awarded Kingphar a contract to supply protective equipment against the coronavirus, so the matter deserves urgency.
Wenxiu further explains how Mosho appointed his law firm and another as his advocates, without declaring a conflict of interest.
“My Lady, Kingphar Ltd is currently one of the companies that was awarded contracts to manufacture sanitiser and personal protective equipment for the Ministry of Health in its fight against COVID-19, a global and national emergency. It follows therefore that matters affecting it ought to be treated with the urgency that they deserve in the public interest,” Wenxiu states. “We had earlier stated that we would explain why the objections to the appointment of the Provisional Liquidator were not heard before Judge Musona. It turned out that the Liquidator had proceeded to appoint his law firm, Lewis Nathan Advocates and Kanga and Bwalya Advocates as his advocates who then proceeded to withdraw the Summons for Stay of the Liquidation.”
Wenxiu further wondered how Kabwe High Court judge Isaac Kamwendo granted a consent judgment to Mosho and others, ignoring objections filed before judge Musona.
“PNP Advocates and Keith Mweemba Advocates (who had filed the winding up petition appointing Lewis Mosho as provisional liquidator) were appointed advocates for Mr Qinghai and the four firms then executed a consent judgment before judge Kamwendo dropping the winding up matter and appointing Mr Mosho as the Business Rescue Administrator,” he explains. “This act meant that the objections before Judge Musona went unheard. Finally, our complaint is that the order placing Kingphar Ltd into supervision was based on an unverified debt. Shareholders and other affected parties such as Development Bank of Zambia filed urgent applications of joinder and to stay the Consent Judgment on 21st April 2020 before Judge Kamwendo. He did not attend to them by way of either signing the ex-parte orders or giving dates for inter-partes hearing until 13th May 2020 when he gave 26th May 2020 as the inter-partes hearing date having refused to grant orders ex-parte. Yet the Consent Judgment was timeously executed and sealed the same day it was filed on 21st April 2020.”
Wenxiu expresses fear that going by the events Kingphar Company Zamia Limited may not receive the justice it deserves if justice Mambilima does not intervene.
“It is our perception that we will not get justice in this matter as we feel that the manner in which the case is registered in the civil case register shows that there was something dubious going on; and the refusal to timeously hear urgent applications for a court which is not that busy at this time only heightens our apprehension. And it is for this reason that we beg that your Ladyship exercises your discretion and allocate this matter to another judge under section 23 (1) of the High Court Act,’’ states Wenxiu. “Further we request that an investigation be conducted into the manner that this matter was allocated two different cause numbers for cases that were already filed and whether any fees were paid at all. We thank you in anticipation of your usual and renowned prompt dispensation of justice.”