A RioZim Limited shareholder has petitioned the High Court to nullify resolutions passed at a recent Extraordinary General Meeting, alleging breaches of insolvency laws and “unconscionable” corporate governance.
In a founding affidavit filed with the court last week, Mr Tendai Rwodzi, a minority shareholder, argues that the EGM held on April 22, 2026, is legally void.
The challenge centres on a claim that the meeting took place after the company had already entered a mandatory legal “freeze” triggered by a corporate rescue application.
Mr Rwodzi asserts that he filed for corporate rescue on April 21, citing insolvency, the day before the EGM, which immediately initiated a moratorium.
Under Zimbabwean law, this moratorium acts as a “legal shield”, suspending all legal proceedings and corporate dispositions to prevent a company from being reduced to a “shell” before a rescue practitioner can take over.
Mr Rwodzi argues that proceeding with the EGM to approve asset disposals while under this shield was a “wilful disobedience of the law”.
The application paints a grim picture of the transactions approved at the EGM, specifically targeting a deal involving Murowa Mine, a related diamond mining entity.
RioZim owes RZM Murowa US$60,8 million.
To settle this, RioZim shareholders approved to transfer its 22,2 percent stake in Murowa and various diamond claims for US$28,4 million.
The transaction includes a provision to write off the remaining balance owed to Murowa, a move RioZim argues is essential to rescue RioZim’s balance sheet and restore its going-concern status.
Mr Rwodzi labels this “corporate incest”, noting that the same directors sit on the boards of both companies and are failing to act in the best interests of either.
“The dissipation of the company’s assets affects 1 651 shareholders, several creditors and employees,” the affidavit reads, warning that without intervention, the company faces “irreparable damage”.
Beyond the insolvency claims, the application identifies several procedural errors that Mr Rwodzi argues render the EGM a nullity.
The notice for the EGM was allegedly signed on March 30 by Mr Allan Murimirwa, whose appointment as company secretary reportedly does not take effect until May 1, 2026.
The Companies and Other Business Entities (COBE) Act requires a 28-day special notice for the resolutions in question.
Mr Rwodzi calculates that only 22 days were provided, making the proceedings “fatally defective.
RioZim is also accused of failing to publish audited financial statements for the year ending December 2025 and neglecting to issue a cautionary statement regarding the “forfeiture of the Sengwa Mine” — a massive thermal power project.
The shareholders also greenlit the sale of several key mining claims to unrelated third parties to raise much-needed liquidity.
These are Mtandahwe Copper and Tungsten for a minimum price of US$3 million and One-Step Gold Mine for US$1 million, with a price adjustment clause.
The consideration could increase if proven in-situ reserves exceed 400kg of gold, though the buyer retains an exit option if resources are found to be unsuitable.
The meeting ratified the US$1,6 million sale of a subsidiary’s property in Msasa and authorised the further disposal of non-core properties in Nyanga and Newlands.
The company successfully secured authorisation for a future loan facility not exceeding US$35 million.
The debt is to be secured against the company’s assets of equivalent value, with the specific terms left to the discretion of the directors.
In a cautionary statement, RioZim responded to a new court application stating they will file formal opposing papers to defend the company’s position.
The company highlighted that a similar application filed by a workers’ union in 2025 was recently dismissed by both the High Court and the Supreme Court.
Legal counsel for the miner, according to RioZim, expressed confidence in a positive outcome, citing the same technical and substantive deficiencies found in previous failed litigation.
Directors emphasised their ongoing efforts to restructure the balance sheet, unlock shareholder value, and secure new capital for mining expansion.-herald
