The Greenbelt Authority has terminated the shareholders agreement between AUM Sugar and Allied Limited and GBI Holdings Limited dated 27th August 2015.
According to a letter dated December 19, 2023, and signed by Greenbelt Authority chief executive officer Eric Dudley Chidzungu, the termination follows the results of a forensic audit conducted at the company recently and it is per Section 12(3) of the Shareholders Agreement.
“The clause mentioned above is to the effect that: The Agreement can be terminated at any time by either JV Partner for good cause, such as causes mentioned below In particular, but without limitation, this Agreement may be terminated for good cause, which means and includes by a JV Partner, if the other JV Partner does not pay any amount payable by it under or in connection with this Agreement and such amount remains unpaid after the expiry of one hundred and eighty (180) days after such JV Partner in default received a notice by the Company or by the other JV Partner requiring such payment to be made.
“By a JV Partner, if the other JV Partner commits a breach or default of any or all terms and conditions of this agreement and such breach is not cured by the defaulting JV Partner within 90 days of the non-defaulting Partner has given written notice of the breach and required remedy.
“The Shareholding Agreement has been breached as per results of the Forensic Audit Report which has revealed that despite not paying in time your equity contribution, you have also been defrauding the Company by raising equity using company financial resources including the numerous governance and fiduciary breaches occasioned in the course of this relationship,” reads part of the letter
Because of the above, Chidzungu gave a 90-day notice of the termination to AUM Sugar and Allied Limited.
“We further draw your attention to clause 12 (5) which is to the effect that as a consequence of the termination of this agreement for good cause in accordance with Article 12 (3), the JV partner in default shall offer its shares to the terminating JV partner at a fair market price, arrived upon by an independent valuation expert so appointed by mutual consent of the JV partners and who shall determine in accordance with the laws of Malawi. We are of the view that this has already been done as the Forensic Audit Report, whose engagement terms of reference were to audit and verify the equity contribution of both parties, has concluded your contribution to be at 12%.
“We thus further formally engage you to propose and agree with us on the payment terms of 12% value in the JV. We would like to thank you for the relationship that existed between us and wish you well,” reads the letter in part
Early this month, the Attorney General Thabo Chikaka Nyirenda has assured Malawians that his office is working on recovering over US$30 million and bring the perpetrators involved in the Salima Sugar Company Limited (SSCL) corruption to book.
He disclosed that the report revealed rampant mismanagement and misuse of resources at the company, saying over US$30 million has been misappropriated by the company through various dubious deals for the past years.
In 2015, government incorporated the Greenbelt Initiative (GBI) Holdings Limited as a wholly state-owned enterprise and, in 2022, the shares in GBI Holdings Limited were transferred to the Greenbelt Authority.
Government identified AUM Sugar and Allied Limited (AUM SAL) as a potential partner and established the Salima Sugar Company Limited Joint Venture in 2015, with a 60 percent ownership by AUM SAL and a 40 ownership by government.
