June 20, 2019 / 12:08 PM / a month ago

Zambian court rejects Vedanta bid to join liquidation case

LUSAKA (Reuters) - Vedanta Resources said it would take urgent steps to protect its Zambian assets and pursue international arbitration if necessary after a Lusaka court on Thursday rejected its request to be included in liquidation proceedings.

A bird flies past the logo of Vedanta installed on the facade of its headquarters in Mumbai, India January 31, 2018. REUTERS/Danish Siddiqui/Files

A Lusaka judge on Thursday ruled Vedanta Resources could not take part in proceedings to wind up its Konkola Copper Mines (KCM) business in Zambia, but granted Vedanta leave to appeal the ruling. The company said it would consider whether to do so.

The case has intensified concerns among international miners about resource nationalism in Africa.

Zambian firm ZCCM-IH holds around 20 percent of KCM, while Vedanta Resources, part-owner of the Mumbai-listed Vedanta group of companies, holds a majority stake.

So far, court proceedings that have appointed a provisional liquidator have not involved Vedanta, which the Zambian government has accused of breaching the terms of its licence.

“It cannot be right for ZCCM, the minority shareholder to pursue this process without the majority shareholder being heard,” Vedanta said in a statement.

It also said there were “no just or equitable grounds to wind up KCM” and said it believed the appointment of a provisional liquidator had added to the financial pressure on KCM, as well as putting jobs at risk.

The statement added Vedanta would challenge any attempts to sell its KCM business to a new owner.

Vedanta said it remained open to engaging with the government, but also resolved the right to seek international arbitration.

High Court judge Annes Banda-Bobo said Vedanta had not filed a “notice of intention” and the court was unable to “order a joinder of the intended second respondent to the proceedings,” while granting Vedanta leave to appeal.

The judge also set down a hearing for July 4 to consider a request for Vedanta and the directors of KCM to be represented by Lusaka-based law firm Nchito & Nchito.

One of the firm’s senior partners Mutembo Nichito is a former director of public prosecutions.

Reporting by Chris Mfula in Lusaka and Barbara Lewis in London; Editing by Alexander Smith and Alexandra Hudson

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