Court throws out Sun Pharmaceuticals winding-up petition

…rules that those who allege fraud must prove it affirmatively to a standard higher than the ordinary balance of probabilities, says the petitioners proved nothing

THE Ndola High Court has dismissed, in its entirety, the petition to wind up Sun Pharmaceuticals Limited, holding that the petitioners, who built their case on an allegation of fraud in fact failed to discharge the burden the law places on those who allege.

Lady Justice S. Chocho delivered the ruling on June 8, 2026 under Cause No. 2024/HN/093, upholding the application of the affected person and majority shareholder, Mr Uddit Sadhu, to set the petition aside. The petition was dismissed with costs but with leave to appeal granted.

The petitioners were Zambia Modern Enterprises Limited and the joint administrators of the estate of the late John C.M. Kalenga. They alleged that the deceased had been a shareholder and creditor of the pharmaceutical manufacturer, and that the company’s shareholding had been fraudulently altered to exclude him.

In Zambian law, fraud is never presumed. Under the Supreme Court’s decision in Sithole v State Lotteries Board (1975), a party who alleges fraud carries an affirmative burden of proof - one higher than the ordinary civil standard.

It is not for the person accused to disprove the allegation; it is for the accuser to establish it, with evidence commensurate with its gravity.

Measured against that standard, the petition collapsed. The official company’s registry record before the Court lists the shareholders of Sun Pharmaceuticals as Sadhu Uddit, Sadhu Nimisha and Sadhu Indira.

The petitioners’ own exhibits did not show the late Mr Kalenga as a shareholder at all.

In the absence of evidence to show that the deceased was indeed a shareholder and evidence pointing to fraud, Justice Chocho held, the petitioners’ case on the shareholding could not be sustained as they had failed to prove the claimed shareholding and that the deceased was a creditor.

The failure of proof was decisive of the whole petition. Without a proven shareholding or debt, the petitioners had no standing under Section 56(1) of the Corporate Insolvency Act No. 9 of 2017 to seek the company’s winding-up; and the matter was in any event res judicata, the same claims having been conclusively determined in the earlier proceedings.

The petition was the last of five insolvency-related proceedings directed at the company across Ndola, Livingstone and Lusaka since February 2024, in none of which was the company served before orders were first sought; the four related matters were struck out between July 2024 and February 2026.

Court records show what the proceedings were for: an attempt - very nearly successful - to divert a substantial Judgement Debt held for the company in escrow at the Ministry of Justice away from its genuine shareholders, by way of ex parte orders.

A demand that the escrowed funds be paid into the provisional liquidator’s advocates’ own bank accounts was halted by the court in April 2024, days before money could move to Keith Mweemba Advocates. Weeks before the ruling, the Court of Appeal separately condemned the culture of ex parte applications in insolvency matters that it said had “mushroomed in the Courts” (Application No. 007/2026, 1 April 2026).

Mr Kalenga died on September 3, 1993; the petition to wind up the company was brought in 2024 - thirty-one years later. And when the estate first came forward, in 2018, the Court of Appeal found the delay was no accident.

The court ruled that the delay was apparent, the administrators “knew about the litigation and waited till payment, to take action” - surfacing almost 25 years after Mr Kalenga’s death, and eleven years after payments on the Judgement Debt began flowing to the company through the Ministry of Justice.

“For more than two years we have had to defend the company in three cities at once, in proceedings we were never served with and discovered only through our own vigilance and our advocates’ skill. The courts have now closed every one of them. We are grateful - and we hope that what happened to us leads to safeguards that ensure it cannot happen to any other business in Zambia.” - a representative of Sun Pharmaceuticals Limited

Ends.