Africa-Press – Malawi. President Lazarus Chakwera’s Tonse Alliance government, through the Green Belt Authority, has terminated its shareholder agreement with an Indian company, Aum Sugar and Allied, for Salima Sugar Company operations.
In a letter by the Green Belt Authority to the Indian company says the decision was reached at an extraordinary shareholder meeting on December 6 following a breach of contract by the Indian company.
The letter signed by Green Belt Authority Chief Executive Officer Eric Chidzungu observes that the Indian Company was not timely paying its equity contribution and that it has been defrauding the company.
The Greenbelt Authority has terminated the shareholders’ agreement between AUM Sugar and Allied Limited and GBI Holdings Limited dated 27th August 2015.
“The clause mentioned above is to the effect that: The Agreement can be terminated at any time by either JV Partner for good cause, such as causes mentioned below In particular, but without limitation, this Agreement may be terminated for good cause, which means and includes by a JV Partner, if the other JV Partner does not pay any amount payable by it under or in connection with this Agreement and such amount remains unpaid after the expiry of one hundred and eighty (180) days after such JV Partner in default received a notice by the Company or by the other JV Partner requiring such payment to be made.
The Green Belt Authority has therefore given the Indian shareholders a 90-day notice to prepare for the new arrangement and, by default, sell its shares to the government at a reasonable and agreeable price.
The termination of the shareholder agreement follows forensic audit results conducted at the company recently and it is per Section 12(3) of the Shareholders Agreement.
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