ESWATINI MOBILE SHARES DISPUTE: PRINCESS LUNGILE CONSENTED TO THE SALE - SHAKANTU

MBABANE – Businessman Michelo Shakantu alleged that Princess Lungile consented to the sale of the shares that were held by her husband, Victor Gamedze, at Eswatini Mobile.

Shakantu said the princess seems to be confused as to the orders she is seeking from the court. This, according to Shakantu, is because on the one hand, the princess states that she consents to the purported and/or speculative sale and transfer of the shares from Cherrybite (Pty) Ltd to Public Service Pensions Fund (PSPF). On the other, in her founding affidavit, she stated that ‘should the sale of shares go ahead as planned, she will suffer irreparable harm’. These two concepts, submitted Shakantu, are mutually destructive.

Shakantu was responding to the application that was filed by Princess Lungile, who ran to the High Court over the sale and transfer of shares, which were previously held by her husband at Eswatini Mobile. Gamedze died on January 14, 2018. In her papers, the princess alleged that her late husband’s shares were transferred to Shakantu, without her knowledge or consent. Princess Lungile approached the court after she learnt that the shares were allegedly being sold by Shakantu to PSPF. Among other business interests, Gamedze held shares at Eswatini Mobile through his company, Stage 1 Connections (Pty) Ltd.

Sole shareholder

The deceased businessman, according to the court papers filed by Princess Lungile through her Attorney Ben J. Simelane, was a sole shareholder of Stage 1 Connections (Pty) Ltd. Gamedze held 1 000 shares. The shares, according to the applicant, stand at over E20 million, as of June 30, 2024. These shares, according to Princess Lungile, were on May 28, 2019, allegedly transferred by the executor of her husband’s estate, Derrick Jele, to Cherrybite (Pty) Ltd, which was allegedly represented by Shakantu. She contended that the shares were disposed of from her husband’s estate without her knowledge or consent. Princess Lungile stated that the transfer was reportedly carried out without a purchase price and without obtaining the necessary approvals.

Purchase price

She argued that the absence of a purchase price in the agreement rendered the purported sale null and void ab initio. Further, she told the court that all indications were that no evaluation of the shares was made prior to their purported disposal or transfer. She said this was consistent with the notion that the shares were literally given away, and ‘I submit that the executor had no right to give the estate assets away as they were supposed to be sold for value’. Shakantu said it was regrettable that the court was seized with an application such as Princess Lungile’s – ‘which lacks the legal requirements for the grant of the orders it seeks’.

Princess Lungile wants the court to order that the purported sale and transfer of 1 000 shares between the executor in Gamedze’s estate Cherrybite, duly represented by Shakantu, be declared to be null and void ab initio. She also seeks an order that the transfer of the said shares by the executor to Cherrybite, dated May 28, 2019, pursuant to the alleged sale, be declared to be null and void ab initio. The princess further prayed that the registrar of companies be directed and authorised to forthwith re-register the 1 000 shares in the name of Gamedze’s sate and that Stage 1 Connections (Pty) Ltd reverts to the control of the executor forthwith.

All the beneficiaries of Gamedze’s estate, according to Shakantu, allegedly consented to the transfer of the shares. He said Princess Lungile also reportedly consented to the shares transfer. Shakantu said in addition to knowledge of the estate debts, the letter written by the executor, Derrick Jele, August 26, 2024, confirmed that, not only was it Princess Lungile, but all the beneficiaries who consented to the transfer of shares.“The applicant cannot, on the one hand, deny that the beneficiaries consented to the sale and transfer of shares, and on the other, rely on a letter which expressly states that she (and the other beneficiaries) consented. To make things worse, she does not even attempt to address the express allegation of consent,” said Shakantu.

Allegations

The veracity of these allegations are  still to be tested in court. Shakantu, Stage 1 Connections (Pty) Ltd and Cherrybite (Pty) Ltd are represented by Banele Manzini of M.J. Manzini and Associates, who instructed Advocate Thakane Mofokeng. The applicant is represented by Ben Simelane of Ben J. Simelane and Associates. Shakantu pointed out that there is no stipulation in the Administration of Estates Act of 1902 that the executor ought to have consent from the master of the High Court or beneficiaries before disposing of any estate asset.
He informed the court that he had been advised that in law, the executor is the person in whom, for administrative purposes, the deceased’s estate vests.

The executor, according to Shakantu, does not in law require the consent of the beneficiaries or the Master in disposing of the estate assets. “Having said that, I submit that on the applicants’ own pleadings, there is conclusive evidence that she and the other estate beneficiaries consented to the sale. “The executor also alluded to the fact that the transfer of the shares was approved in the Liquidation and Distribution Account. This has not been disputed by the applicant,” he alleged. Shakantu said the princess is seeking a single item of substantive relief: That the court should order and direct that in the event that a sale of shares between Stage 1 Connections (Pty) Ltd and the purchaser, PSPF, or any other buyer, the proceeds should be kept in an interest-bearing account.According to the applicant, the order is to be designated by the court for that purpose, pending finalisation of an action to be instituted by the princess at the High Court.

Sale of shares occurs

He submitted that the very wording of this text clearly reveals that the relief she is seeking is premised on the conception that the order she wants should remain latent, until the sale of shares occurs. “Put differently, this honourable court should grant an order that will only become effective once the sale of shares eventuates. “I say so because the application takes the form of a ‘preservation order’ which will only be effective once the ‘proceeds of the sale exist’,” said Shakantu. He submitted that, to the extent that no payment is received, the order will be of no effect. He argued that the matter cannot, therefore, be urgent, where the relief sought is based on ‘speculative, abstract and hypothetical speculation’. As a result, he said the application should be struck from the urgent roll for lack of urgency. Shakantu also stated that the application by the princess is fatally flawed because its premise is that the order will sustain legal life once payment is received by the executor.“To this extent, the application is fatally flawed in that it seeks mutually destructive reliefs,” he said.

Does not oppose

“On the one hand, it is made patently clear by the applicant that she does not oppose the proposed sale of shares by Cherrybite to the Public Service Pensions Fund. “This is positively stated by her in paragraph 48 where she avers that ‘…the sale of the shares to sixth respondent (PSPF) will be in the best interest and benefit of the estate of the late Victor Gamedze’,” said the businessman. In another paragraph, according to Shakantu, the princess stated that ‘…the balance of convenience favours that the sale of shares and transfer of shares should go ahead…’.Read together, said the businessman, these positive averments clearly indicate that the applicant does not oppose the proposed sale by Cherrybite.

He said in fact, she allegedly recognises that Cherrybite, as things stand, has legal title to the subject shares and can proceed to dispose them of by way of sale. He told the court that Cherrybite cannot sell what it does not own. In her founding papers, The princess indicated that she intends to institute legal proceedings, whose object is to challenge the legal title of Cherrybite to the subject of shares.

Authorised to sell

Shakantu said: “The very shares which the latter is being authorised to sell. This is a contradiction in terms. The express authorisation to Cherrybite to dispose of the shares will raise, or has raised, an unassailable defence of estoppel. On this basis, the intended action is doomed to fail.”Estoppel is a legal doctrine that prevents a person from going back on their word or making assertions that contradict what they have said or done previously. It can be used as a defence or to prevent the re-litigation of issues. Shakantu said the applicant’s application is misconceived. The matter is pending before Judge Zonke Magagula.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: