'Companies abusing judicial management'

BULAWAYO - The High Court has raised concern over a number of distressed companies applying for judicial management, saying some are abusing the process meant to assist firms get back on their feet.

Speaking during the official launch of the 2014 judicial year in Bulawayo last week, Judge President Justice George Chiweshe expressed concern over the number of companies applying for judicial management.

“Owing to harsh economic conditions, many companies are struggling to survive. Applications for judicial management are on the rise,” Chiweshe said.

“However, some companies are abusing the process.”

To cushion themselves from harsh economic conditions, companies in Bulawayo have been applying for judicial management since they did not qualify for the Distressed Industry Marginalised Areas Fund (Dimaf).

“It is now common for companies under distress to file applications for provisional judicial management or liquidation. Thereafter they do nothing to ensure that a judicial manager or liquidator is appointed,” Chiweshe said.

At the beginning of last year, the High Court revealed that about 20 firms in Bulawayo had applied for judicial management since 2010 while 10 others were in liquidation.

He said the Master of High Court has been appointed to resolve the matter.

“The Master has been directed to clean up the mess,” Chiweshe said.

In Bulawayo, National Blankets, Tabs-Avon Lighting, Asmara, Belmont Leather, Textile Mills, Security Mills, and Archer Clothing were placed under judicial management in the past five years, revealing the adverse effects the economy has had on the industry.

Last year Geozing Pawn Brokers was placed under liquidation after it failed to pay thousands of clients, Duze Oil and Walters Bakery were also put under liquidation.

While Ocean Park, trading as Tashas Supermarkets one of the most vibrant retailers at the beginning of dollarisation, Lazen Bury Engineering, Totamela Enterprises Paramount Motors, Partec and Polyfoil Zim Apple Groove Investment, were placed under judicial management during the same period.

Reeling from massive de-industrialisation, with an estimated 100 companies having closed shop in Bulawayo over the past two years — obsolete machinery, cash flow problems and economic hardships continue to haunt the ailing industry.

Industrialists in Bulawayo have called upon government to immediately effect Bulawayo’s special economic zone status as outlined in the Zim Asset, a move expected to ease operations for companies with incentives for increased production.

Comments (3)

One of the abusers is a certain andrew toendepi of david whitehead and underhill

cheated - 20 January 2014

throw some light on Capital Base of Mutare pliz

vuyo - 22 January 2014

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Clean Water - 23 January 2014

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