HIGH COURT OF LESOTHO
ELECTRIC S.A. (formally Spie Batignolles) Applicant
OF PUBLIC PROSECUTIONS Respondent
Application on Review
by the Honourable Mr Justice T. Nomngcongo on the 11th December 2003
an application on a notice of motion in limine of criminal
proceedings by a company that goes under the name Schneider Electric
S.A. (Formerly Spie Batignolles). The company seeks orders in the
that the summons in the criminal proceedings under Case No.
CRI/T/111/99 has not been regularly and properly served
that Martin Walter Lins was irregularly and improperly cited as a
director or servant of applicant in Case No. CRI/T/111/99;
that Martin Walter Lins is not representing the applicant in the
Criminal proceedings under Case No. CRI/T/111/99;
the applicant further and /or alternative relief.
has its beginnings some time ago when a number of individuals,
partnerships and companies, nineteen in all, were indicted
Court on a multitude of charges alleging bribery received or
proferred. All these entities were included in one indictment.
came to be that it was ordered that they be charged separately. One
such entity in the joint indictment was a company called
Batignolles. It was cited as Accused number 8. Now that, Spie
Batignolles immediately took up issue with the Director of Public
Prosecutions, representing the crown in similar terms as the present
applicant apparently under the misapprehension that they were
prosecution. They have since dropped their application when it was
made clear that in fact the target was the present
the accused in the indictment is still referred to as Spie
and most obvious question was what business the applicant had in
bringing this application when its name suggested that
it was a
totally different company albeit in brackets it refers itself as
"formerly Spie Batignollies. This is the more so
because in his
founding affidavit one Juan Pedro Salazar says in no uncertain terms
"Applicant had no further interest in the Lesotho Highlands
Water Project contracts transferred to Spie 2. It ceased to be
member of the joint ventures LHPC and MHPC....." (Par 12 of the
simple answer to the question which I repeated after hearing argument
on behalf of applicant was that the present applicant
"successor in title" to Spie Batignolles and it realized
that it was at risk.
follows is an intricate web of corporate manipulation spun somewhere
in France with its yarn reaching over to the Kingdom
It goes as follows:
to one Juan Pedro Salazar who deposed to the founding affidavit
sometime not quite specified a company was formed and
France under number B542048574. This company's name was Spie
Batignolles. Salazar calls that company Spie.l. This
by itself or in conjunction with other companies with which it formed
a partnership tendered for and was apparently
contracts by the Lesotho Highlands Development Authority (LHDA).
19th May 1995, Salazar says this company entered into what he calls a
"contribution and divestment agreement" with
registered French Company called Gesilec in terms of certain
provisions of the French Law which he says are of the
24th July 1966.
In terms of the annexed agreement the registered address of both
companies was Cergy Pontoise (95863), 10 avenue
de 1 Enterprise. The
preamble to the agreement (a translated version has been attached
marked "A2") has very
provided for example on behalf of the ''Contributor" as follows.
"Which, subject to the condition precedent of the realization of
the Spie Batignolles/schneider SA merger, shall dc denominated
SCHNEIDER SA as of the date of its special shareholders* Meeting of
the 27th June 1995".
behalf of the beneficiary
"Which, subject to the conditions precedent of the realization
of the contribution hereinunder and of the SPIE BATIGNOLLES/SCHNEIDER
SA merger shall be denominated SPIE BATIGNOLLES as of the date of its
special shareholders' meeting of 27 June 1995."
therefore of the "contribution and divestment agreement",
Spie Batignolles divested itself of all its assets
and deposited them in the French Company Gesilec which at the same
time at the special shareholders' meeting held
on the 27th June 1995
changed its name to none other Spei Batignolle.
prefer to call the original Spie Batignolle at a meeting of the same
date the 27th June 1995 merged with another French Company
Spei Batignolles now assumed the latter name which was later changed
to Schneider Electric SA. Interestingly however it retained
original registration number B540248574. What this means is that when
the original Spie Batignolles decided to dissolve itself
without the sanction of any court either here or in France what ever
the law is in that distant land, it left its name
in Lesotho and
whatever else was associated itself, including most of its employees
according to Salazas would have us believe.
It never even bothered to
change its registration number as an external company in Lesotho. It
retained its face in this country
intact. On the other hand it left
in France the number on the basis of which it was registered in
Lesotho as external company in
the hands of a completely different
entity. I have no doubt in my mind that this was calculated to
deceive and to send the authorities
of this country on a wild goose
chase. It is directly in conflict with sec. 21 of the companies Act
No. 25 of 1967 which provides
in no uncertain terms that:
21 (2) No name shall be reserved and no company shall be registered
by a name which is identical with that for which a reservation
current or with that of a registered company or registered external
company or which nearly
resembles any such name as to be calculated to deceive unless the
registered company or registered external company is in liquidation
and signifies its consent to the registration in such manner as the
Registrar may require.
otherwise ordered by the Minister, the Registrar shall not register
a company by a name which in his opinion is calculated
Spei Batignolles is doing business as usual in Lesotho
notwithstanding a non-compliance with a further provision in
Companies Act Sec. 286
(3) that "if any alteration is made in —
charter, statutes or memorandum and articles of an external company
or other instruments.......
the external company shall, within six weeks of such alteration lodge
with the Registrar for registering a return containing particulars
the alteration ...."
this leads me to is that whatever happened in France nothing did
happen in this country. If something did happen in France
meant to mislead and calculated to deceive us in Lesotho. The present
applicant was no doubt a party to such machinations
as were done in
France. It is hardly a coincidence that all the so called mergers
deposed to by Salazar
by resolutions of special shareholders' meetings on the same date.
All of these were done for no demonstrable reason around
when the net was closing around one Mr. Masupha Sole, who it is
alleged received bribes from Spie Batignolles.
this it has done not only in clear violation of the law but also in
breach of its contractual obligations: Article 3. 1 of
contract between the LHDA and the joint ventures of which Spie
"3. The contractor shall not, without the prior consent of the
employer (which consent notwithstanding the provisions of sub-clause
1.5 shall be at the sole discretion of the employer) assign the
contract or any part thereof, or any benefit or interest therein
thereunder otherwise than by:
charge in favour of the Contractor's bankers of any monies due or to
become due under the contract.
to the Contractor's insurers (in cases where the insurers have
discharged the contractor's loss or liability) of the
right to obtain relief against any other party liable."
it was situations such as these that Lord Denning had in mind when he
"Most merchants and most traders are now limited liability
companies. Not only in England but also in Countries overseas.
law, however has let down a curtain which conceals the goings on of
the directors and managers of a company. Beneath this curtain
sorts of fraud can be perpetrated, on customers, creditors and on
shareholders". See The Due Process of Law by the Rt.
Denning M.R. (London Butterworths 1980)
It is in
cases like this that the court is entitled to "pierce the
corporate veil" and see an entity for what is it is.
indications in this case are that in all probability the companies
involved in France in what I can only regard as a scam were
control of the same Board of directors and managers and the shares
were controlled by a few individuals. The same people
problem in circumventing the company laws of Lesotho without even
changing the faces of their servants. It is no wonder
that when Lins
received summons they immediately knew, as it was put, that they were
at risk. This is a classic case where "
fraudulent use is made
of the fiction of legal personality for purposes of improper
conduct". See Company Law by Cilliers
Benade 4th Ed Butterworth.
conclude therefore that the company Spie Batignolles, whether it be
Spei 1 or Spie II is the same economic entity for the purposes of the
pending criminal proceedings in CRI/T/111/99. The applicant
was a mere red herring intended to deflect attention from this
reality. Spie Batignolles is still a partner in the joint
Lesotho Highlands Project Contractors whether it be called Spie 1 or
Spie II and the company registered as an external
Lesotho registration number 87/18E. Martin Walter Lins being a
servant of one of the partners of the said joint venture
therefore properly served with the summons in the said pending
criminal trial. (See Sogreah and Others v Director of Public
Prosecutions (CRI/T/111/99) This is in terms of sec.338(2) of the
Criminal Procedure and Act of 1981.
come to this conclusion it becomes unnecessary for me to consider all
the other arguments raised on behalf of the applicant
therefore ordered as follows.
application is dismissed with costs.
Walter Lins is ordered to appear and plead on behalf of the accused
on the post-poned date of hearing being the 1st of
order be served upon the said Martin Walter Lins.
Viljoen : For Applicant Mr Van Zyl :
Applicant Mr Penzorn : For Respondent/Crown
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