The Commercial Division of the High Court in Blantyre on Monday adjourned the case in which minority shareholders of Illovo Sugar (Malawi) Limited dragged their company and its 11 directors to court over claims of fraudulent financial transactions.
The matter first came before court for hearing on April 12 but presiding Judge John Katsala deferred it to May 9 following fresh applications filed by the concerned parties.
He directed that all preliminary matters be heard on May 9 because of the applications filed by the parties.
However, hearing of the interpartes application started on Monday before the judge adjourned the matter to June 20.
According to court documents seen by The Nation, the plaintiff made an inter-partes application for an order for the defendants to produce documents in their possession, custody or power for inspection by the plaintiff and its lawyers to “peruse the same and to take copies thereof.”
The Malawi Stock Exchange (MSE)-listed sugar company and its directors were taken to court by Prudential Holdings Limited, a holding company representing some minority shareholders, over claims of falsifying the company’s financial statements and holding information from them.
The court was also scheduled to hear an application by the defendants to have the matter commence by way of writ of summons and not originating summons.
According to Civil Case Number 33 of 2016 filed on February 9 2016, Prudential Holdings Limited also claims that Illovo Sugar was making payments to “undisclosed related parties” and unexplained payments to Illovo Sugar in South Africa and its parent company, Associated British Foods, in the United Kingdom.
In the affidavits H. Savjani, G. Tembo and A. A. Kalanda, the plaintiff are demanding that Illovo Malawi and/or its directors should disclose commission payments of $500 900 (about K335 million) and $900 000 (K603 million), the details of the transactions and procurements that attracted a K300 million interest with Illovo South Africa.sworn by messrs R.
The minority shareholders also accuse Illovo Sugar (Malawi) Limited, which listed on MSE in 1997, of failure to disclose excessive borrowing which increased by 40 percent, the financial costs increased by 135 percent and a bank draft which increased by K1.2 billion, saying borrowings have had no rationale and were without any adequate or proper consideration by the board.