Zimplats in R80 million debt battle

02 Nov, 2014 - 02:11 0 Views

The Sunday News

Thulani Ndlovu
CONSTRUCTION company Cosira Global Communications (CGC) last week made a High Court application for the recognition of an order of foreign liquidation granted to the company in Mauritius and to register a foreign liquidator, a first step towards recouping more than R80 million allegedly owed by Zimbabwe Platinum Company (Zimplats).
CGC which is incorporated in Mauritius but headquartered in South Africa executed a construction contract with Zimplats in July 2012 for the supply, fabrication, delivery and erection of concentrator piping, materials, handling, fire water piping, tailings piping and the installation of free issue of inline items and valves at Ngezi Mine.

According to the court records Zimplats has paid CGC about R54 million, an amount which puts the value of the whole contract at more than R130 million. The outstanding balance is R84 047 934,16.

Mr Xavier Koeng, an insolvency practitioner with global law firm ENS Africa, Mauritius, deposed an affidavit in an ex parte application alleging that he was appointed a liquidator of the company in Mauritius by the creditors of the company. He added that CGC was wound up after failing to pay more than R5 million owed to Cosira South Africa Proprietary Limited (Cosira SA).

“Cosira SA demanded that the company pay the amount of R5 520 356,79, which demand received no response and the company has therefore been wound up based upon an inability to pay its debts,” said Mr Koeng. “Although I do not have personal knowledge I believe that the reason the amount is calculated in South African rand may be that the company is part of a group of companies known as the Cosira Group which has its headquarters in South Africa.”

Furthermore, Mr Koeng revealed that the company has credit of under R3 million in bank accounts in Mauritius.
In assessing the financial position of the company, Mr Koeng revealed that the company to date had received claims totalling about R12 million rand.

“I aver that to the date of this affidavit no statement of affairs was filed in the liquidation so that from the limited information I have been able to gather, it appears that the company is commercially insolvent as it cannot pay all its creditors as and when due.

“It has creditors whose claim at least exceeds R10 million and debts due which could amount between R40 million and R30 million. The company has cash of an amount of R2 852 550 and is no longer trading.”

Mr Koeng also revealed that the debt owed to CGC by Zimplats has been attached by another Zimbabwean creditor of CGC that is Intro-Wise Catering Services.

“I am advised that there is various litigation which currently exists and has not been finalised relating to a claim by an entity known as Intro-Wise Catering Services against the company (CGC) in terms of which a debt due to the company by Zimplats has been attached to found jurisdiction against the company and in order ultimately to be paid the amount of the debt which has been attached.”

However, Mr Koeng petitioned the High Court to annul the attachment of the debt, saying “according to the Companies Act a creditor is not entitled to continue to enforce a right or a remedy against any property of the company and an attachment put in force is void.”

“I am therefore advised that whether Mauritanian law or Zimbabwean law applies, the actions taken by Intro-Wise in Zimbabwe against the company (CGC) cannot be continued under the Zimbabwe Companies Act,” suggested Mr Koeng.

He further advised Intro-Wise to prove their claim in the liquidation of CGC during the distribution of the company’s liquidated assets. If a company is liquidated all creditors are treated equally.

Mr Koeng said it was necessary for the High Court to extend its recognition of him as a liquidator of CGC in Zimbabwe so that the creditors were treated equally and there was consensus.

“It is in the interests of the general body of the creditors that all the assets of the company be managed by a single liquidator. Furthermore, it is necessary or it may become necessary for me to perform the following functions in Zimbabwe.

“Obtain an accounting or the amount paid by Zimplats thus far to the company, either informally or in litigation proceedings. Liaise with accountants and Zimra to determine what tax may be due to Zimra and which may have to be deducted from the amount paid by Zimplats to the company.

“If Zimplats does not pay what is due, it may be necessary for me in my capacity as liquidator to institute proceedings for the recovery of the amount due.”

In summation Mr Koeng said it was necessary the current status of CGC assets in Zimbabwe required his recognition on an urgent basis to avoid the chaos of each of the company’s creditors acting individually in executing against the company’s assets as Intro-Wise had purported to do, at a stage when it was winding up in the country of its registration (Mauritius).

“It is desirable that the orderly payment of creditors according to the preference contained in the Insolvency laws of Zimbabwe be applied to Zimbabwean assets,” he summed.

High Court is expected to rule on the application of Xavier Koeng this week.

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