TDLR: There is no mention of Jin Cheng as an affiliate, partner or associate in the 2017 contract and Jin CHENG seemingly can not be a party to the 'free transfer' or Thirdparty transfer condition of article 9 of the Cominaire / AVZ / Dathcomir (read Dathcom) contract. i.e. they cannot receive shares from Cominaire without AVZ pre-emption. Furthermore, AVZ has (at least) 3/6 board members on Dathcom. They could have easily slapped down any motions to include JinCheng as an Associés (partner).
The RCCM website (a website that records companies in DRC) lists Jin Cheng as a partner of the Dathcom, however this seems to have been a fairly recent update and cannot be relied upon to indicate whether a free transfer of shares to an affiliate could take place.
The RCCM website lists Jin Chen as an Associés (partner) of Dathcom Mining (see screenshot below).
To some, this may lead one to believe that they may be a party of a 'free transfer' of shares between associates/affiliates as listed in "Article 9.1 [part] a)" of the Dathcom contract (see screen shot below).
But, it seems that this registration of Jin CHeng as an Associés (partner) on the RCCM website happened recently and AVZ disputes the validity of adding JinCheng to the list of partners. It seems that the the registration of Jin Cheng on the RCCM website was updated on the 23rd of November last year following a decision by a court in November (as mentioned on the Zijin Wechat thread - https://mp.weixin.qq.com/s/u_eUOBDSi6OLrOMa-T4VBA).
Prior to this, Jin Cheng was probably not listed on the RCCM website as an 'Associés' (partner). We cannot see a list of changes before this date, however as can be read on the same RCCM "This registration was the subject of a repossession of archives dated Nov. 24, 2021. Only formalities subsequent to the date of repossession of the archives are available." (RCCM National - see website, search Dathcom, click on 'details' then 'formalities'). In other words, there was a change on this date and we cannot see what the partners were before because of a 'repossession' of archives. I say that Jin Cheng was probably never listed as a partner, because they were never mentioned as a party, associate, affiliate, etc. (at all) in the Dathcom 2017 contract.
What to make of this then? According to the contract, if Jin Cheng was legitimately transferred shares, they would have needed to be an 'affiliate' or 'partner' of the involved companies and/or Dathcom contract. They could have receive shares in Dathcom via one of two ways. Firstly, via a 'free transfer' scenario (if they are an 'affiliate' or party to the Dathcom Contract); OR secondly, via a 'third party' scenario (with an important caveat).
Free Transfer Scenario:
Of important note is that, the Dathcom contract stipulates that an 'affiliate' can be a party to the free transfer of shares. Therefore this party can gain more shares from another party without having to go through the rights of 'pre-emption' (right of refusal). However, under the terms and definitions of the Dathcom contract, an affiliate is a company that 'directly or indirectly holds more than 50%' of the voting rights of the partner in the contract (e.g. holds more than 50% of Cominaire/AVZ/Dathomir) (see screenshot).
Therefore, if JinCheng does not hold more than 50% of Dathomir/Cominaire/AVZ, they are not an 'affiliate' of the contract and cannot be a party to the free transfer of shares.
So unless, Jin Cheng was added to the contract as a affiliate or partner they cannot be in receipt of a free transfer of shares. Thus, Jin Cheng fall under the classification of a 'Third Party' .
Third Party Scenario:
According to the Dathcom contract, shares cannot be transferred to a third part during a 'blocking period" (a period of time between the date of the contract [2017] and the Definitive Feasibility Study [sometime last year when the DFS came out]), however, after this, they can be transferred to a third party with a special caveat.
The caveat is, that other parties to the contract have right of refusal or pre-emption as it is listed in the contract. There are claims that Cominaire called a few board meetings but these were refused by AVZ for whatever reason. So, Cominaire proceeded with legal action and forced a transfer of shares to Jin Cheng - which is said to have been done so illegally.
As AVZ has legal right of pre-emption this is/was considered a breach of contract and should not have taken place and will be sorted out by the 'DRC General Inspectorate of Judicial and Penitentiary Services' as requested by the 'DRC Minister of Justice' (as mentioned in AVZ announcement - ASX+Annoucement+Decree+to+Award+Mining+Licence.pdf (squarespace.com)).
Of further note:
According to the DATHCOM contract (see photo), AVZ has 3/6 board positions on the Board of directors, one of which is the chairman. They can also appoint representative(s) to represent them in the case of them being absent from a board meeting. Thus, even if Cominaire called a board meeting, calling for a vote to include Jin Cheng as a Associés (partner) and the AVZ board could not physically be present, this could have been slapped down by their representatives. Dathcom needs a majority to move any motions within the purview (scope) of the Dathcom board. I say this to clear up any idea that Covid may have impeeded AVZs ability to get there and be represented on the Dathcom board.
Interestingly, Cominaire is part of the Ministère du Portefeuille RDC (Minister of Portfolio - 90% ownership). There seem to be elements of a power struggle between parts of the governments (both state and federal and between departments).
I would suggest that the the 'DRC General Inspectorate of Judicial and Penitentiary Services' and 'DRC Minister of Justice' will take a look at this and reprimand Cominaire for breaking the Dathcom contract and also selling their share in Dathcom at such a ridiculous discount (see other posts about how much).
All of this is IMO. Not to be taken as financial advice. Do your own research. Follow the links. I maintain a buy sentiment as this has been overhyped and AVZ is a target atm. I rest my freaking case.
Dukun
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