Tetrad judgement should not be generalised: Expert

11 Jun, 2017 - 00:06 0 Views
Tetrad judgement should not be generalised: Expert

The Sunday News

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Dickson Mangena, Business Reporter
THE Tetrad Bank landmark ruling should not be taken to generalise the situation that companies under judicial management are going through, a judicial manager has said.

Justice Happias Zhou last week ruled in a case involving Bindura University of Science Education and Tetrad Bank that being under judicial management was not an excuse for not paying depositors their dues, especially banks. The ruling was viewed as likely to open floodgates of writs of attachment of property, especially by banks.

In an interview, Mr Chrispen Mwete of C Mwete and Company, a judicial manager who is managing a number of companies under distress said the judgment should only be viewed as an independent case.

“The judgment is and should only be taken as an individual case, if the court found out that there was a need for the company to pay its debtors, the way it ordered it means the evidence was pointing that there was something amiss with that particular case. However, the judgment should not be taken to generalise the issue on companies on judicial management,” said Mr Mwete.

He said the judgment should also not go against the Companies Act.

“The judgement, although I am not sure of the details, should not go against the Companies Act as the Act is meant to also ensure that before liquidation the company should be saved. However, I cannot dispute that there are other companies that are actually just buying time,” said Mr Mwete.

He also said the judicial management process was also being stifled by litigation cases that are always hanging over companies.

“We are having a torrid time in trying to turn around a number of companies because of continued cases that are hanging over us. There are companies that are in a lot of legal battles that are hindering them to start full operation. Some of the legal battles are between the very creditors that need repayment and the company and yet the company is supposed to start operating so as to pay them back. It would be sad if the companies go under liquidation as assets are way lower than what is owed,” said Mr Mwete.

He said there are companies that have in the past benefited from judicial management and are now able to repay debts.

“There are companies that were put under judicial management and their fortunes turned around. So we need to give judicial managers a chance to turn around the companies, it is Government policy that the companies should be saved rather than liquidated,” said Mr Mwete.

Mr Mwete is the judicial manager of Applegrove Investments, Marvo and Wetblue Industries.

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