Ester Mbathera
Chinese-owned lithium mining giant Xinfeng Investments has won a Supreme Court battle confirming its ownership stake in Orange River Exploration Mining CC after a disputed cancellation of company records.
The matter was heard on 12 March, and judgment was delivered on Wednesday by a panel consisting of Chief Justice Peter Shivute, Acting Justice of Appeal Rita Makarau, and Acting Justice of Appeal Dave Smuts.
Justice Makarau wrote the judgment, with Shivute and Smuts concurring.
The case stems from an April 2022 agreement where Peter Shifwaku, who owned 100% of the mining company, sold 85% of his interest to Hineni Investments, with Gideon Benjamin Smith as nominee.
When Hineni failed to pay, Shifwaku cancelled the agreement and sold the same interest to Xinfeng Investments, Likulano, Sauiyele January, Yujing Li, and Yiming Xie for N$50 million.
On 30 June 2022, a new founding statement was filed, listing Xinfeng and its partners as owners of Orange River Exploration Mining CC.
The Business and Intellectual Property Authority (BIPA) former chief executive officer Vivienne Katjiuongua cancelled the registration on 8 July 2022, claiming it was fraudulently obtained.
The court ruled that BIPA had no legal authority to unilaterally cancel the registration of an amended founding statement, even if fraud was suspected.
According to the court, the Close Corporations Act provides no such power. When the decision was made, Xinfeng and its partners were not given a chance to be heard, which, according to the court, violated their right to fair administrative action.
Xinfeng challenged the move in the High Court.
The court ruled that the registrar acted beyond her legal powers and violated the right to be heard.
The cancellation was set aside, and the company’s interests were restored to Xinfeng and its partners.
Smith, Hineni Investments, Protocol Secretarial Services, and Ellis & Partners appealed the High Court ruling.
They argued that the founding statement had been fraudulently registered and that the registrar had acted correctly.
They claimed Xinfeng gained no valid rights.
The Supreme Court dismissed their appeal and upheld the High Court’s ruling.
The court said the registrar had no authority under the Close Corporations Act to cancel a registered founding statement.
“The fifth respondent was not entitled to cancel the registration, as she did not have the requisite power,” the judgment reads.
The court also criticised the failure by Smith’s legal team to file a counterapplication challenging the 30 June registration.
It said the fraud allegations alone were not enough to undo the registration without proper court action.
The court ordered Smith, Hineni Investments, and the Registrar to cover Xinfeng and its partners’ legal costs.
*Windhoek Observer
