ADAM Bede’s raging shareholder dispute has prompted the intervention of the Public Service, Labour and Social Welfare ministry to address the workers’ concerns, NewsDay Business can reveal.
One of the shareholders, Simon Chinganga who holds a 50% stake in the business, has approached the High Court seeking relief after co-shareholder Tapson Madzivire sought to oust him through an “unprocedural resolution”.
The dispute, which has been dragging for two years, spilled to the Supreme Court on May 18, 2021 under civil application number 575/20. Judgment was reserved.
Recently, workers held a meeting with the Labour ministry to address the matter.
Adam Bede workers committee chairperson Edmore Makwara said the purpose of the meeting was to address employees’ grievances.
“The purpose of the meeting was to try to bring the directors of the company on board to discuss the way forward towards addressing workers’ grievances. Labour officer (Willis Munorweyi) ordered the National Employment Council (Nec) to resolve the issue but employers did not come,” he said.
In their grievances filed with the ministry, workers said they had not been paid overtime since February 2021.
They said they were working without protective clothing, while attempts to engage shareholder had failed.
Munorweyi declined to comment and referred questions to secretary for Public Service, Labour and Social Welfare Simon Masanga.
Masanga had not responded at the time of going to print.
NewsDay Business understands that the protracted dispute has affected the business.
Workers have staged industrial actions over unpaid salaries. Some workers were arrested a fortnight ago for picketing.
The dispute, which spilled to the courts in 2019, has seen the High Court ruling in favour of Chinganga.
The High Court issued a provisional order stipulating that the
“resolutions purportedly made by the 1st respondent (Madzivire) on the 3rd of November 2018 and afterwards concerning the applicant’s position in Adam Bede Manufacturing are invalid and hereby set aside.”
The High Court also said:
“The resolutions passed on November 3, 2018…and any changes effected thereafter to the shareholding or directorship of Adam Bede be and are hereby suspended.”
Chinganga had argued that his interests had been nullified in violation of company statutes.
“The applicant averred that he owns (1) share which he has not transferred to anyone in terms of article 1 of the articles of association. At a certain point, a shareholding agreement was drafted to include the second respondent as a shareholder but this never materialised. The applicant called for an extraordinary meeting which was held on November 3, 2018,” he argued.
“The meeting degenerated into chaos and at some point, the applicant left the meeting. Certain resolutions were made at the meeting which were to the effect that the applicant was no longer a shareholder, director and company secretary. Furthermore, he discovered that his email had been blocked and that he had been removed as a signatory to the company’s bank accounts.”
But Madzivire said the resolutions were made in the presence of Chinganga.
“The applicant cannot be heard to cry foul when some of the resolutions were made in his presence and he is the one who called up the meeting. The applicant was not involved in the setting of the company which was actually started through a memorandum of agreement for the sale of a business between Hunting Furniture (Pvt) Ltd and Extreme Security Group (Pvt) Ltd represented by the first respondent. The applicant cannot impose himself as he was a mere ‘invitee’ to the company,” he said.
However, the court nullified all resolutions which were made without Chinganga’s consent.
Contacted for comment Madzivire said his dispute with Chinganga had not impacted the smooth running of the company.
“We would like to inform you that whenever there is a dispute between directors, this is bound to affect operations but we are glad that the situation in terms of operations, is firmly under control,” he said.