Stop the KCM liquidation process – Green Party
The Green Party has urged the government to stop the Konkola Copper Mines (KCM) Liquidation process. The opposition party said the government must rethink the whole process and abandon the strategy before it could ruin the economy.
Green Party Leader Peter Sinkamba says the whole process is contradictory starting from the appointment of the Provisional Liquidator in the name of Milingo Lungu to the analysis on how possible would it be if court asks the liquidator to auction the copper cathodes. He warned that if not handled well, this process can hurt Zambians economy.
“As the Green Party, we find Government position on liquidation of Konkola Copper Mines (KCM) not only stunning and contradictory but also ill-disposed. We urge Government to rethink and abandon the liquidation strategy before it is too late as it will awfully hurt the economy even more,” Sinkamba said in a statement on Thursday.
“We say the move is contradictory in the sense that from the exparte order appointing provisional liquidator Milingo Lungu, it is stated that the liquidator has been charged with powers to carry on with the business of KCM. Carrying on the business of an entity under liquidation does not constitute liquidation.”
Sinkamba said liquidation is all about dissolution of a business and not carrying on with a business, adding that the role of a liquidator is not to run a business but wind it up.
The opposition leader explained that winding up is the process of settling of accounts in anticipation of dissolution of a company.
“In this regard, if the objective of Government’s take-over of KCM operations is to carry on with the business of KCM with a view to rescue the business from alleged insolvency, then instead of going for liquidation, ZCCM-IH should have commenced proceedings under Section 21 of the Corporate Insolvency Act No.3 of 2017. This Section provides for rescuing a business which is in a financial distress, if there is a reasonable prospect of rescuing that company from going under. Furthermore, this Section has a better human face in that when triggered, chances are very high that the company’s creditors are likely to achieve better outcomes than in a case when a company is liquidated,” he said.
“A liquidator is an undertaker or a malukula. His core job is to sell assets to settle the liabilities in a manner prescribed in Section 127 of the Corporate Insolvency Act No.3 of 2017. After selling the assets, first and foremost, he must pay himself for costs and expenses incurred for winding up, including auditors and lawyers’ remunerations. Second priority is to pay Government liabilities including environmental costs running in millions of dollars as well as taxes, duties, rents, and rates. If there is still change remaining, the next on the priority list is local councils’ liabilities.”