Court hears record 17 administration, liquidation cases in a day as economy groans

Court hears record 17 administration, liquidation cases in a day as economy groans

By Chipo Musoko, HARARE, February 25 (The Source) – The High Court on Wednesday attended to a record 17 cases of companies under judicial management and liquidation, a sign of the country’s worsening economic crisis with many firms closing shop and leaving creditors — mainly the taxman, employees and banks — in the lurch.

The last record, of 16 cases heard in one day was reached in February 2014.

Among the companies under liquidation were Jupiter Insurance, Shumba Milling, Lifesmart, Console Motors, Clarke Engineering, Jewellery Services, Corvan and Zambezi Power while those under judicial management included Romsdal, which recently dumped its judicial manager, and former Apex Corporation subsidiary Precision Grinders.

During the meetings, creditors presented new claims worth close to $1 million.

Among the creditors were the Zimbabwe Revenue Authority and TelOne, which made claims in most of the companies, and employees.

Creditors to Precision Grinders, once a major manufacturer of agricultural equipment and machinery, were told that if the company were to be liquidated it would generate $50,000 versus liabilities worth over $800,000.

“If the company is liquidated, its obsolete, antiquated plant and machinery will at most realise $50,000. And if the company is liquidated creditors will not get a dividend,” Winsley Militala said.

He said if the company’s assets were to be sold, the income generated would go towards administration costs, and called for the company to be placed under final judicial management which both shareholders and creditors agreed to.

On Shumba Milling , liquidator Theresa Grimmel told creditors who had presented claims worth $127,000 excluding previous claims that assets worth $50,000 had been sold and that creditors were not likely to get much.

“I first have to pay NSSA, ex-employees and Zimra. Chances are that you may not get much and so don’t expect you will get money tomorrow,” she told creditors who had besieged the court.

Official figures show that over 4,000 companies have closed shop since 2011, rendering over 63,000 people jobless with more firms facing closure this year.