|13 companies placed under judicial management this year|
|Saturday, 22 December 2012 19:49|
Busines ReporterAT Least 13 companies were placed under judicial management in Bulawayo this year as the city continues to face massive challenges that have almost brought industry in the second capital to its knees.
High Court records seen by Sunday Business last week show that prior to 2006, four companies were placed under judicial management. In 2007, 2008 and 2009 one company was placed under judicial management and liquidation while in 2010, six companies were listed under judicial management. In 2011, 11 companies were placed under judicial management and in 2012, 13 companies have been placed under judicial management.
This means that more than 30 companies have been put on judicial management in the last few years.
Some of the companies that are under judicial management and liquidation include Bulawayo Kitchen Box, True Win Investments, Nerry Investments, Stanchem Enterprises, Spornet Investments, Red Queen Trading, Nessa, Universal component, Vicking Plastics, Four Winds Kwikspar and Baobab Industry.
The companies were placed under judicial management and liquidation for various reasons but all linked to operational challenges forcing shareholders or authorities to take the court action.
Papers for one of the affected companies — True Win Investments, which was put under liquidation midyear show that the High Court granted an order for: “the existing directors of the company and any other person vested with management of the company be and hereby divested of their powers and authority as directors of such management.
“All court actions and proceedings and execution of all writs summons and other processes against the company be and are hereby stayed and must not be proceeded without the leave of the court,” said the order.
The papers show that True Win Investments sustained losses due to the hostile economic environment countrywide.
It is alleged that the finance manager may have mismanaged cash receipts and payments to the tune of $7 000 for Zimbabwe Electricity Supply Authority (Zesa) payments.
Economic analysts said liquidation was a noble idea but a sign of the deteriorating conditions in the industry
An economic analyst, Mr Sam Ncube, said placing companies under judicial management aids the ailing companies in helping them recover from economic meltdown and saves employment.
“Placing a company under judicial management is a way of resuscitating and trying to protect companies from total collapse and saves people from massive unemployment,” said Mr Ncube.
Mr Ncube urged company owners to be innovative as some of the companies are using outdated theories which might lead to failure of their companies.
“Judicial management is mainly caused by the economic situation which continues to worsen in the Matabeleland region,” added Mr Ncube.
Apart from companies that have been placed under judicial management, close to 100 companies have closed down in Bulawayo putting more than 25 000 workers out of jobs.
The Government has failed to provide adequate funding to resuscitate companies in the city.