The High Court in Blantyre has blocked acquisition of Universal Industries Limited and Universal Farming and Milling Limited by Magnolia Investments Limited after it transpired that the firm had already signed a share purchase deal with another prospective buyer.
Universal Industries board of directors on Wednesday announced that Magnolia Investments Limited, a subsidiary of Central Poultry Group, had acquired 100 percent shareholding in the two companies with effect from June 1 2016.
However, the process was halted after Lala Limited, owned by Blantyre-based businessperson Mike Chilewe Jnr, rushed to court blocking the exercise claiming he had a binding purchase agreement with the company’s directors.
An order for an interim injunction issued by judge Kenyatta Nyirenda prohibits the company directors from proceeding with the sale.
The court has given Universal Industries directors 10 days effective June 7 2016 to file an inter partes application for the continuation of the injunction.
According to a share purchase agreement Lala Limited signed with the two manufacturing companies, the sale was expected to be completed and the companies handed over to the purchaser by June 30 2016.
“… Or any other date mutually agreed by the parties by the payment of the full consideration and the delivery of all necessary transfers, duly executed share certificates and all other documents hereby agreed to be handed over,” reads the contract signed on October 8 2015 by Chilewe Jnr on behalf of Lala Limited and Divyakant Kanubhai Amin on behalf of Universal companies.
Chilewe Jnr said he stopped the sale as he was not notified of any change of plans when the deal was almost coming to an end.
Universal Industries Limited chairperson Dinshi Amin declined to comment, saying he was in a meeting.
On Tuesday, misunderstandings erupted after Universal Industries Limited employees demanded severance pay from management following the selling of the company.
Universal Industries, manufacturers of biscuits, confectioneries, savoury snacks, beverages and nutritional foods, has been operating in Malawi since 1958. n