RioZim, Falgold tussle in court

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RIOGOLD has dragged Falcon Gold Zimbabwe (FalGold) to the High Court – accusing it of failure to make full disclosures during the acquisition of Palatial Gold Investments (Palatial) about four years ago, court documents seen by The Financial Gazette show.
The company, which is a subsidiary of Zimbabwe Stock Exchange (ZSE)-listed RioZim, took control of the Kadoma-based resources group in September 2016 and which also owns the prized Dalny Mine (Dalny), which consists of a processing plant, mining claims, related infrastructure and equipment as well as a workers’ compound.
“Before the arbitrator, RioGold sought to enforce Falcon Gold’s obligation to indemnify it against liabilities of Palatial Gold that were either not disclosed or not adequately disclosed as required under the agreement,” ex-RioZim chief executive Bhekinkosi Nkomo said.

After finalisation of the transaction, the ZSE-listed firm realised that 813 Dalny employees had not been paid salaries totalling US$11 million, mine houses were not occupied by civil servants as had been alleged by its erstwhile partner and, hence the former had been economical with the truth ahead of the consummation of the deal, he said.