HIGH COURT OF LESOTHO
MONYANE 1ST APPLICANT
FIEE 2ND APPLICANT
KHUBELU KAPHWIYO 3RD APPLICANT
by the Honourable Chief Justice Mr. Justice J.L. Kheola on the 30th
day of July, 1999
an application for an order in the following terms:
Rules of this Honourable Court pertaining to periods and modes of
service be dispensed with.
a Rule Nisi be and it is hereby issued returnable on the date and
time to be determined by this Honourable Court calling
Respondent to show cause (if any) why:
contract with the Respondent shall not he declared to have
terminated on the 1st day of July, 1999.
between Applicants and the Respondent shall not be declared to have
ceased on the 1st day of July, 1999.
Proceedings scheduled for the 12th day of July 1999 instituted by
the Respondent against the Applicants shall not
be stayed pending
shall not be directed to pay 1st Applicant for a minimum period of
two (2) years and severance pay for a period of
five (5) years
minimum basic pay in a lump sum payment.
shall not be directed to pay 2nd and 3rd Applicants their salary
for a minimum period of two (2) years and severance
pay for a
period of two (2) years minimum basic pay in a lump sum payment.
intended disciplinary proceedings shall not be declared to have
been instituted out of time and of no force and effect.
hereof in the event of opposition.
and/or alternative relief.
Prayers 1 and 2 (c) operate with immediate effect as an Interim
the hearing of this matter was started the 4th applicant, Mr. Palo
Kotelo, was joined. In other words CIV/APN/278/99 and
were heard as one application because the facts of the two cases are
the same. The four applicants were managers
of the respondent. The
first applicant alleges that on the 1 January, 1998 he entered into
the second five (5) year contract with
the respondent. In terms of
the contract he was employed with the respondent as a General Manager
and Managing Director for five
years. The contract is marked Annexure
11th December, 1997 the first applicant was served with a letter of
suspension dated the 11th December, 1997. This letter
Annexure "B". The purpose of the suspension was to enable
the new management to take over management and operations
respondent and to allow investigations to be conducted into the then
precarious financial position of the respondent.
regard to the first contract which ended on the 31st December, 1997
the applicant was paid all his benefits including gratuity
pay. On the 11th June, 1998 the respondent informed the first
applicant that his suspension was extended until further
2nd July, 1999, 1½ years after his suspension the first
applicant received a letter from the respondent advising him
disciplinary hearing respondent intended to institute against him.
The letter is marked Annexure "K". There were
all of which related to the period of the first contract which ended
on 31st December, 1997 for which he had been
paid all his benefits.
applicant alleges that the letter inviting him to a disciplinary
hearing came after commencement of provisions of Legal
Notice No.6 of
1999 dated the 30th June, 1999. In terms of Schedule B of that Legal
Notice the sale of
stake in the respondent is being made to the Standard Bank (Pty) Ltd.
applicant alleges that this clearly constitutes a change in the
shareholding of the respondent. The Legal Notice further
that the "proposed privatisation of the Bank is the 1st July,
1999." The Legal Notice is marked Annexure "L".
applicant avers that in terms of clause 8.2 of his contract (Annexure
"A") he shall be entitled to deem it a
dismissal of himself
as the Executive by the employer (who will be in breach of agreement)
where the employer shall in terms of
clause 8.2.1 reconstruct its
affairs, 8.2.1. 1 change its shareholding, 18.104.22.168 any compromise or
arrangement with other organisation,
22.214.171.124 be taken or take over
some other establishment, 126.96.36.199 change materially its business. He
alleges that the taking of majority
stake by Standard Bank (which in
terms of Annexure "L" commenced on the 1st July, 1999) is
change in respondent's shareholding.
Further, even if it were to be
said that the shareholding had not materialised on the 1st July,
1999, clearly an arrangement had
been reached with Standard Bank at
that date as evidenced by the physical presence of management and or
personnel of Standard Bank
Kingsway Maseru and personally known to
the 1st applicant.
to me that the crucial issue in this case is whether the proposed
privatization Scheme of Lesotho Bank 1999 did take place
on the 1st
July, 1999 as intended. This is a question of fact. The applicants
bear the onus to prove on a balance of probabilities
proposed privatisation did in fact take place. In Schedule C of
Annexure "L" certain steps are listed which
concluded before the privatisation can take place -
Step(i) has apparently been taken because a new company has been
registered. It is Standard Bank (1999) Ltd.
Step(ii) transfer of title to identified landed properties of the
bank to the new company. I am not aware of such evidence that
has taken place.
Step(iii) liquidation of the remaining assets of the corporation.
Again I am not aware of any evidence that this has taken place.
Step(iv) issue of Government bonds etc. Again there seems to be no
evidence that this has been done.
Step(v) Signature of the sale Agreement for the divestiture. This
does not seem to have been done.
was on the applicants to satisfy the Court that all the
abovementioned steps had been concluded.
Schedule C of Annexure "L" it is stated that a special
audit commissioner by Government is presently being carried
purposes of reconfirming the balances of the assets and liabilities
to be transferred to the new company. Again there is
no evidence that
this special audit has been completed.
matters in which there is no evidence that they have been concluded
must be looked at in the light of the affidavit of
Mustepha Swaray who holds the office of Governor of the Central Bank
and Commissioner of Financial Institutions in the
Kingdom of Lesotho.
He avers that he confirms that no transfer of shares or material
change in business has been effected within
the respondent to date.
He confirms that no compromise or arrangement has been made by the
respondent with any other party.
confirms that he addressed a meeting of the Institute of
on the 2rd July, 1999 at the Lesotho Sun Hotel. In his speech he
referred to the fact that a new entity named Lesotho
Bank (1999) Ltd
has been registered and therefore came into existence of 1st July
1999. This institution will as soon as it initiates
is business focus
on corporate banking. The corporate banking functions of the
respondent will in due course be transferred to
the new institution.
He also confirms that none of the steps envisaged have taken place
thus far. The respondent is presently continuing
all its functions
and in the same form as before. When the proposed changes will take
place, is still a matter of uncertainty and
will only be initiated as
circumstances permit. The proposed privatisation of the respondent,
as announced in Legal Notice No.61
of 1999, has therefore not taken
place on 1st July, 1999.
quoted the affidavit of the Commissioner of Financial Institutions
verbatim because it is a very important piece of evidence
states the facts that the proposed privatization of the respondent
never took place on the 1st July, 1999. He is the person
know these matters due to the position he is holding.
and Milling Mercantile Law of South Africa, 7th editions at p.751 A
"Compromise" occurs when a company discharges
obligations to creditors
by way of
a settlement less than full payment in cash for its indebtedness. An
"arrangement involves a reorganization of the
share capital of
the company, a transaction involving the company and its
shareholders. A "reconstruction" of a company,
flow from a compromise or arrangement, involves the company forming
itself into a new company which is to take over its
assets and its
to me that none of the abovementioned things have taken place as yet.
It may be the reorganisation of the share capital
of respondent will
take place in the future but at the present time it has not taken
"proposed" used in Annexure "L" must be given its
simple and grammatical meaning. It means "put
consideration, propound; set up as an aim." "Or put forward
as a plan". See Concise Oxford Dictionary
of Current English.
Clearly what was intended to be done on the 1st July, 1999 was not
supporting affidavit Mr. Tseko Bohloa alleges that in reference to
the status of Lesotho Bank as from 1st July, 1999 the
mentioned existence "in parallel" of Lesotho Bank 1999 Ltd.
at the "old Lesotho Bank. He mentioned that
Lesotho Bank 1999
Ltd would initially focus on corporate banking. The "old"
Bank would continue its winding up process as well as clearing
unreconciled items as well as clearing unreconciled items
process of being transferred to Lesotho Bank Ltd. It may be that as
at the 3rd July, 1999 the two banks existed "in
but we do not know what had happened to the share capital. It is the
evidence of the Governor that the proposed
privatisation has not
Metlae and Mr Matooane , counsel for applicants, have submitted that
Annexure "L" amounted in substance to an
"L" was published in terms of section 19 of the
Privatisation Act 1995 which provides that upon approval
Privatisation Scheme by the Cabinet, the Privatisation Unit shall
cause to be published, that approved Privatisation Scheme
Gazette and in a newspaper circulating in Lesotho. I do not agree
with the submission that Annexure "L" was an
offer. It was
a publication for information to the public. In fact at that stage
there was no need to publish the name of the identified
The next stage appears in section 20 of the Privatisation Act 1995
which provides that after the approval of the Privatisation
the Cabinet the Privatisation Unit shall then identify the potential
purchaser. After that the Privatisation Unit shall
Minister report that fact to the Cabinet for Cabinet's approval of
the sale of a parastatal included in the approved
Scheme to the
purchaser. Annexure "L" cannot be an offer even before
Cabinet has approved the potential purchaser. I do not
think that the
Privatisation Unit can have the power to make an offer even before
Cabinet has approved the purchaser.
applicants' contention is that as a result the provisions of clause
8.2 of their various contracts they deem themselves dismissed
the respondent is in breach of the agreement in terms of the above
provisions of their contracts. That after dismissal
employer/employee relationship ceased, and that disciplinary
proceedings instituted after dismissal are redundant and of no
This allegation by the applicants has now become of very little
relevance because of the above ruling of the Court that conditions
are not yet ready for the provisions of clause 8.2 of their contracts
to become operative. In other words the employer/employee
relationship between the applicants and the respondent is still in
case the question which I wish to pose is this: Supposing that during
the subsistence of the first contract which ended on
December, 1997 the first applicant had actually stolen respondent's
money or property. Supposing that the discovery of
the thefts is
found after the termination of the first contract. What law provides
that the applicant can no longer be prosecuted
because the first
has terminated and that he was paid his full terminal benefits? Can
the employer not recover his money in a civil court?
Act No.6 of 1861 does not provide for that. I was not shown any law
or authority which supports the above allegations.
The respondent is
entitled to institute disciplinary proceedings against all the
reasons stated above on the 20th July, 1999 I discharged the rule
Applicants - Mr. Matooane and Mr Metlae
respondent - Mr. Loubser
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