Lewis Morshaw’s takeover bid for Sun Pharma rejected

Lewis Mosho’s takeover bid for Sun Pharmaceuticals rejected

For the avoidance of doubt, it is held that this case is indeed time-barred and the ex parte order granted by this Court on 16 April 2024 appointing the Chief Executive of the Republic of Zambia as the Official Insolvency Administrator and Provisional Corporate Rescue Administrator is hereby discharged and this case is dismissed as time-barred”…

The Livingston High Court has dismissed an application by an employee of Sun Pharmaceuticals Ltd to liquidate the company’s business.

This is similar to the route Lewis Nathan Advocates took when liquidating the affairs of The Post Newspapers.

In this case, the Supreme Court awarded millions of dollars in damages to Sun Pharma shareholders because the company overpaid on its loans to the Development Bank of Zambia (DBZ).

It is these funds that have generated intense interest in the company, with Lewis Nathan Advocates having filed a number of lawsuits on behalf of the estate of the late Karenga MP and other parties.

In the Livingstone case, Lewis Nathan Solicitors acted on behalf of the Karengas in their application for business rescue of Sun Pharmaceuticals, alleging that the company owed past wages and benefits to an employee, Mr John Machetta.

In her ruling setting aside the ex parte order made in April 2024, the Honourable Lady Justice Mbile Wina ruled that in the instant case, apart from Mr Musheta’s claim that he was owed wages for more than 30 years, he had not produced any evidence to prove to the court that there was indeed a rescue plan to implement for the defendant company.

She ruled that similarly, the second affected person, Jacob Funyina, had merely repeated the applicant’s claims that he was the administrator of his late father’s estate, was allegedly a former employee of the defendant company and was owed arrears for the period 1992-1993.

Judge Weiner ruled that the 30-year deadline meant that the second affected person’s claim was also time-barred and therefore the statute of limitations had expired.

She said the first affected person (Uddit Sadhu) suggested the court was abusing its power.
It is alleged that an identical winding-up application was filed in the Ndola High Court, case number 2024/HN/93, and that prior to that winding-up application, the main parties, the Karenga brothers, had filed an application in this court in Ndola but later discontinued the application and re-initiated new proceedings in Livingstone.

“Since it has been stated that the matter is in fact barred, the question of whether this matter is an abuse of the court process
Becomes useless”.

“For the avoidance of doubt, it is held that this case is indeed time-barred and the ex parte order granted by this Court on April 16, 2024 appointing the Chief Administrator of the Republic of Zambia as the interim corporate rescue administrator is hereby discharged and this case is dismissed for being time-barred.”

The lawsuit was filed by John Musheta, who calls himself
Sun Pharmaceuticals Ltd. owed him salary and severance benefits for the period from January 1991 to December 1992.

But the company’s manager and shareholder Uddit Saddu responded that Sun Pharmaceuticals Limited had never been asked to pay wages.
the applicant is due a payment or termination of benefits and he only became aware of the claim for the first time through this action.

He said that neither he nor Sun Pharmaceuticals Limited had received the original process issued in this action, nor any other documents obtained in this action to initiate the business rescue and appointment of provisional liquidators of Sun Pharmaceuticals Limited.

He therefore insisted that Sun Pharmaceuticals Limited did not owe Mr. John Musheta any salary or termination of contract
benefits for the period from January 1991 to December 1992 or any other period, even assuming that the claim was valid, would be out of time under Zambian law.

He said Mr. Musheta never produced any employment contract to prove that he was an employee of Sun Pharmaceuticals, nor any document to prove that he was entitled to receive a monthly salary of $3,000 from Sun Pharmaceuticals Limited.

He said Mr Musheta produced a letter of instructions purportedly from Mankolo Nayani, the joint liquidator of Union Bank of Zambia Limited, to J & M Advocates to collect an alleged debt from Sun Pharma.

It must be stated that Union Bank of Zambia Limited is not involved in this action and
The letter mentioned therefore has no meaning.

He said if Union Bank did have a genuine claim against Sun Pharmaceuticals, it should have made the claim directly to Sun Pharmaceuticals Ltd and not through an agent.

He said it was clear that the applicant had no standing to bring a lawsuit against Sun Pharma
Ltd., based on the alleged stale claim or in fact on the alleged claim filed by Union Bank Zambia Limited.

Lewis Nathan Advocates also made a similar application and used a similar approach when it liquidated The Washington Post.

According to Mr Sadhu’s affidavit, the proceedings are seeking to achieve similar purposes as the proceedings filed ex parte by the Zambian side by Lewis Mosho on behalf of Zambia Modern Enterprises, John and Mususu Kalenga at the Ndola High Court under case number 2024/HN/93, where Justice Lameck Mwale granted an ex parte order on February 28, 2024 appointing a provisional liquidator, Mr Tresphfod Kabanga, but the appointment has now been set aside.

Likewise, Tresphfod Kabanga will be appointed as the corporate rescue administrator for the Livingstone matter.

In the case of The Washington Post, they took advantage of worker Abel Mbozi, obtained orders from exporters and then proceeded to liquidate The Washington Post.

The matter was extensively discussed in the Supreme Court ruling of February 17, 2022.

The court delivered its judgment in the case of Fred Mmembe and Post Newspapers Limited v Abel Mbozi and Others (Appeal No. 7 of 2021). The case involved an appeal by shareholders and directors of a liquidating company against a lower court decision. Lewis Mosho was accused of using export orders to illegally liquidate the company’s affairs.

The case came to the fore after University of Zambia law lecturer Dr. Obrien Kaaba exposed the abuse of power and corruption in the National Assembly.

In the case of Sun Pharmaceuticals Ltd, the attempt was to abuse the power of the State Courts to obtain an ex parte court order to alter the company’s status and transfer the judgment debt payable compensation fund to a group consisting of Lewis Mosho et al.