Legal battle over IPTL management far from over

The legal wrangle among shareholders of the Independent Power Tanzania Limited (IPTL) has taken a new twist, with one of the owners, Mechmar Corporation, faulting Standard Chartered Bank Hong Kong (SCBHK) Limited for filing a fresh application challenging the current management set up.

The SCBHK, the project finance lender to IPTL, has filed an application, seeking the appointment of an independent administrator of the IPTL, pending other legal proceedings. Mechmar owns IPTL jointly with VIP Engineering and Marketing Company Limited.

Mechmar’s statement, faulting SCBHK’s decision, has come a few weeks after the Court of Appeal of Tanzania nullified proceedings of the High Court, including the 2011 order that sought the winding up of IPTL over allegations of fraud and mismanagement.

The Appeal Court panel, comprising Chief Justice Chande Othman and Justices January Msoffe and Edward Rutakangwa, declared in their December 17 ruling that the High Court committed fatal irregularities in the conduct of impugned proceedings.

The Appeal Court also nullified all proceedings in cases number 49 of 2002 and 254 of 2003. 

The panel ordered that another judge of the High Court should hear the matter expeditiously, including challenges, if any, the competence of an application lodged by SCBHK Limited, seeking an appointment of an administrator for IPTL.

But in an interesting turn of events, Mechmar Corporation now says SCBHK does not have genuine reasons for trying to get involved in the IPTL administration since the company is not in receivership.

“SCBHK has brought the Administration Proceeding not because it is entitled to, but simply because it would desperately want to avoid winding up of IPTL,” it said.
Source: The Citizen, reported from Dar es Salaam
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