BULAWAYO — Companies in Bulawayo are reportedly abusing the option for judicial management to dodge huge debts they would have accrued and to buy time, judicial managers have said.
This year alone from January to September, the Bulawayo High Court has placed more than 10 firms in key industries under judicial management and three under provisional liquidation as the economy continues to stall.
Firms placed under judicial management include Marvo Stationery, Wet Blue Industries, Lowveld cotton ginner, Romsdal Investments, Chakata Resources Zimbabwe, Tagarira Brothers, Setsail Equipment, Observant Enterprises, Hadad Enterprises, Willsgrove and Savanna Wood.
Lasker Brothers, makers of the Archer brand of shirts, Trade Power and Wenbrough were placed under provisional liquidation.
“Some companies are opting for judicial management just to run away from debts they would have accrued and some because they have no business plans at all. In other words they are abusing the system to buy time,” Chrispen Mwete of C Mwete and Company, who is a judicial manager said.
Judicial management would give companies some breathing space and an opportunity for them to use outside expertise to recover.
Marvo owes 103 workers, who have gone for 20 months without pay, in excess of $200 000 while Chakata Resources owes creditors $357 000, including its employees.
Lasker Brothers has debts of $6,559 million while Trade Power owes $4 million.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Another judicial manager, Philip Ndlovu of PNA Chartered Accountants, said as judicial managers, they were finding it hard to manage some companies because of lack of capital.
“There is no cash for products as customers do not have money,” Ndlovu said, adding that some companies under judicial management needed restructuring to survive which often takes a long time to complete by which time it might be too late to save them.
With the manufacturing sector in particular struggling, some economists have called on the government to provide a stimulus package for firms through concessional funding. — The Source
