Court throws out shareholders’ case

FAUSTINE KAPAMA

THE High Court’s Commercial Division has rejected the case lodged by two shareholders with National Investment Company Limited (NICOL), Salum Shamte and Boniventura Mtei, challenging company resolutions to take action against the former management for alleged misuse of 10bn/-.

Judge Haruna Songoro reached this decision last week after allowing one ground of objection presented by three respondents, NICOL and interim management led by the Company’s new Chairman, Dr Gidion Kaunda and Manager Kinoni Wamunza, that the petition was incompetent.

The judge ordered the petitioners to pay costs. Through their advocate Benjamin Mwakagamba from BM Attorneys, the respondents had stated that the petition in question was incompetent for not been supported by a valid affidavit sworn by the petitioners (Mr Shamte and Dr Mtei).

The affidavits deponed by the petitioners bore different numbers with the petition. The respondent had stated, therefore that the petition was bad in law as it contained affidavits in respect of Miscellaneous Application No. 4 of 2012 and not Miscellaneous Commercial Case No. 11 of 2017.

In the petition, the two petitioners had stated that the meeting convened by the interim management on November 26, 2016, was invalid because there was no proper quorum and no audited accounts of NICOL for years 2010 to 2015 were produced, thus resolutions reached thereafter were also a nullity.

However, the respondents had strongly disputed the claims by the petitioners, stating that the failure to produce the financial reports for 2010 to 2015 was contributed by lack of cooperation from the former NICOL management, who refused to handle over control of the subsidiary companies.

The companies are Tanzania Meat Company and Fisheries Development Company. They stated further that the petitioners and the ousted Board Chairman of NICOL have been instituting numerous frivolous court cases and obtained injunctive orders to frustrate the operations of the company.

Briefing on NICOL shareholders meeting held in December last year, Dr Kaunda said that the audit financial report by KPMG, who are Independent External Auditors, for the period ending December 31, 2009, showed that the company had accumulated losses totaling 10bn/-.

This position, he said, contradicted the claims by the former management of the company that NICOL was financially sound and was making profit.

According to him, it was also revealed that due to alleged gross mismanagement of NICOL and its subsidiaries that prevailed during the former company’s management and it became necessary for the management to commission forensic audit for Tanzania Meat Company Limited.

“Apart from financial mismanagement, government taxes were not paid and employees’ social security was not remitted. Reckless investments made without carrying out due diligence will be subjected to thorough review to establish their viability and appropriate action to be take for each,” he said.

He further pointed out that during presentation of the financial report shareholders were also informed of the achievements and challenges faced by the Interim Management from the date of their appointment in 2012.

Among most disruptive occurrences to the interim management’s work, he said, were attributed to 41 court cases, the latest being the one decided on November 25, this year, lodged by Salum Shamte, Vice- Chairman with TPSF and his associates unsuccessfully attempted to prevent the annual general meeting.

Dr Kaunda pointed out that it was also explained that Mr Felix Mosha directly or indirectly initiated most of the cases and the reason being that he refused to recognize the shareholders’ decision as well as court decisions he himself had filed and persistently claimed to be the legitimate chairman of NICOL.

Despite all the challenges encountered, he said, since assuming responsibility for NICOL leadership operations by the Interim Management, there has been a progressive improvement of the company’s financial performance.

He said that from 2012, under the Interim Management profitability has been increasing annually, rising from 472m/- to 1.026bn/- in 2015. He said further that equity has progressively risen from 30.8bn/- in 2011 to 94bn/- in 2015.

“All this was made possible by rigorous control of costs, prudent and sound investment in the equity market and minimization of risky investments,” the company’s chairman said.