• November 30, 2022 12:15 am

Mulli , AG Depot reposession case awaits Court determination

May 4, 2022

By Malawi Exclusive

The Republic Versus Liquidator cause number 254 0f 2021 case in which Government intends to reposes depots previously owned by Shire Bus lines awaits judgement following successful submissions from the both parties Nyasa Times understand.

Judge Jabber Alide has been hearing the case while Counsel Hastings Bofomo Nyirenda is the liquidator under Shire Bus Lines. 

In the case Thabo Chakaka Nyirenda in the Ministry of Justice starts his defence by giving the court background of what Shire Buslines is all about.
   
He tells the court that Shire Bus Lines, previously known as Nyasaland Transport Company Limited before being called United Transport Company Limited and later Stage Coach Company Limited was owned by the Malawi Government. 

He says however, in or around the year 2007, Shire Bus Lines went into voluntary liquidation and Mr. Hastings Bofomo Nyirenda was appointed its liquidator.

The AG argues that following liquidation, all assets of the company came under the control of a liquidator who was supposed to manage the company until all creditors were paid up plus all liquidation expenses while the surplus assets is distributed to the shareholders.  

Chakaka further says on 1st October, 2007 the Malawi Government incorporated a company known as ‘the Assets Holding Company’ which was supposed to hold some of the landed property and infrastructure including workshops and depots previously belonging to Shire Bus Lines Limited ‘the use of which Government is willing to make available to the PPP Company on agreed terms.’ 
The AG says on 28th January, 2008 the Malawi Government drafted memorandum of understanding (MOU) which was supposed to be signed by the National Bus Services Limited, AGMA Holdings Limited t/a AXA Coach Service, David Lally t/a Bigfoot Express, Abdul Himan Ibrahim t/a Swank Haulage, Simama General Dealers Limited and Halo General Limited. 

“The aim of the MOU was to cover the process of investing in a new bus company in a public private partnership with the Malawi Government. The cost of the project was estimated at MK1,500,000,000.00 to cover the acquisition of 66 buses. A copy of the said MOU is already on the Court file and is marked ‘TCN1.” Argues Chakaka.

The AG argued that in terms of Clause 5 of the MOU ‘the name of the ‘New Bus Company Limited’ was to be changed to New Bus Lines Limited or any other name as the Board of Directors would deem fit. 

He further tells the court that in terms of Clause 6.1 of the MOU, Participation in the PPP Company was supposed to be through subscription for shares by the GOM and each of the listed parties individually. Per Clause 6.2 of the MOU, the consideration for subscribed shares shall be in form of cash as well as Acceptable Relevant assets which he exhibited in court and hereto marked the same ‘TCN2’ a copy of the said MOU.

According to the AG the Malawi Government, AGMA Holdings Limited, Halo General Limited, Swank Haulage and Simama General Dealers appended their signatures to the MOU while Big Foot Express and National Bus Services Limited never appended its signature to the MOU. 

The AG in his submission said letter dated 26th July, 2013 the Public Private Partnership Commission PPPC informed the management of National Bus Services Limited that it had received several representations from bus operators expressing concern about the conflict of interest situation in the management of bus terminals formerly owned by Shire Bus Lines. 

“PPPC underlined that National Bus Services was acting as the bus operator and manager of terminals which constituted a conflict of interest and greatly undermined competition and, therefore, was in conflict with the Competition and Fair Trading Act. PPPC proceeded to give notice to terminate the management of bus terminals and occupation of bus depots by National Bus Services. The termination was to become effective on 30th September, 2013.  On 27th September, 2013 National Bus Services Limited commenced proceedings against the Public Private Partnership Commission under Commercial Cause No. 160 of 2013 being National Bus Services Limited v. The Public Private Partnership Commission. National Bus Services Limited also obtained an order of injunction restraining the Public Private Partnership Commission from evicting it from the premises that were previously owned by the Shire Bus Lines Limited. The injunction was granted by Kachale, J.  The parties thereafter engaged in an out of court settlement discussion. However, the discussions fell through.  The injunction still subsists.” Argue the AG.

The AG deponent that letter dated 20th January, 2020 the Secretary for Local Government and Rural Development directed the Lilongwe City Council, Kasungu Municipal Council, Blantyre City Council and M’mbelwa District Council to take over management of Wenela, Lilongwe, Kasungu and Mzimba Bus Terminals respectively with immediate effect. 

“The Councils were further requested to ensure that the structures were improved befitting the city, municipality and district standards through various strategies including but not limited to public private partnership. I exhibit hereto and mark the same ‘TCN4’ a copy of the said letter from the Secretary for Local Government and Rural Development.” He argued adding that 
On 30th January, 2020 National Bus Services Limited responded to the Secretary for Local Government and Rural Development letter  arguing that the assets constituting the property of National Bus Services Limited were transferred to National Bus Services Limited by the Malawi Government as an incentive for National Bus Services Limited to ‘operate in less profitable remote roads which meant huge maintenance costs for our buses’ besides the fact that ‘government also owns shares in National Bus Services Limited which were represented in running and managing these bus terminals.’ 

However, National Bus Services Limited upon being requested by the Secretary for Local Government and Rural Development through letter dated 13th February, 2020 and the PPC never produced any document evidencing such transfer.  

“I exhibit hereto and mark the same ‘TCN6’ a copy of the said request by the Secretary for Local Government and Rural Development.”

On the 5th day of February, 2020 National Bus Services Limited obtained an order for permission for Judicial Review challenging the decision of the Secretary for Local Government and Rural Development in which the latter directed the Blantyre City Council, Lilongwe City Council and M’mbelwa District Council to, with immediate effect take over management of Wenela, Lilongwe and Mzimba Bus Terminals/depots. 

National Bus Services further obtained an order staying the decision of the Ministry of Local Government and Rural Development. The order was granted by Honourable Justice Mbvundula. 

I exhibit hereto and mark the same ‘TCN7’ a copy of the said order by Honourable Justice Mbvundula however the  Liquidator of Shire Bus Lines Limited wrote National Bus Services Limited giving notice of disposal of plots of land belonging to Shire Bus Lines Limited and invited National Bus Services as the current users to bid.  

On 19th July, 2021 National Bus Services Limited obtained an order of injunction against the Liquidator of Shire Bus Lines Limited and the Attorney General restraining the selling of plots previously owned by Shire Bus Line Limited being Plots 66 and 276, Mzimba Boma, and Plot NY487, Blantyre pending arbitration. 

Chakaka argue that all the injunctions obtained by National Bus Services Limited and the court proceedings commenced by National Bus Services Limited were wrongly granted and the proceedings wrongly commenced since there is no document that supports the argument by National Bus Services Ltd that the properties that were previously owned by Shire Bus Lines Limited were transferred to National Bus Services Limited by the Malawi Government or PPC. 

Even if there were such document, such transfer could be invalid as the Malawi Government or PPC have not validly transferred the said property because they lacked legal title to the said property.

“In view of the foregoing reasons, I humbly pray to this Honourable Court that the application for disposal of the proceeding on preliminary points of law should be granted with costs. I understand that this sworn statement shall be used in a proceeding and acknowledge that if I have made a false statement, I may commit perjury and be liable to a substantial penalty” 

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