BUSINESS lobby group Affirmative Action Group (AAG) has criticised the appointment of non-Bulawayo-based judicial managers for struggling companies accusing them of derailing the revival of the city’s industries. MTHANDAZO NYONI OWN CORRESPONDENT
This follows complaints by shareholders of Merlin (Pvt) Ltd that the firm’s judicial manager, Cecil Madondo of Tudor House in Harare, had failed to resuscitate the troubled textile company.
Merlin has been under provisional judicial management since 2011.
Merlin shareholder Delma Lupepe complained towards the end of 2014 that creditors had secured a credible investor who was prepared to pour $30 million into the firm for new equipment, including machinery for manufacturing pampers and women’s sanitary wear.
Speaking to Southern Eye Business, AAG vice-president Sam Ncube said judicial managers from outside Bulawayo did not understand the city’s business environment, resulting in them failing to turn around the companies they were appointed to manage.
“Judicial managers must be local,” he argued.
“We are against these judicial managers because they do not understand the Bulawayo business environment. We are going to wage unspecified action against them.”
Ncube said creditors of Merlin, one of Bulawayo’s key industries in the clothing sector, had managed to secure a Japanese investor, but Madondo was dragging his feet.
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“It is mind boggling to find that other people do not want to see industries in Bulawayo being resuscitated because they want to enrich themselves,” he said.
“It’s a very bad culture that needs to be addressed and we cannot allow that to continue happening.”
He accused Madondo of selling Merlin machinery in order to pay himself while workers and creditors got nothing.
However, Madondo dismissed the allegations as untrue saying he made several efforts to bring investors on board by engaging them, but because Merlin had been closed by Lupepe’s board as well as existing litigations, it was difficult to attract investors.
“It is a fact that even if based in Harare, I managed to resuscitate the company by having it removed from provisional liquidation to judicial management,” he said.
“I successfully fulfilled my mandate of paying all creditors from profits generated from operations and the purchasing consideration.”
Madondo said he appreciated any efforts to bring investment to the company and remove it from judicial management compared to bringing investors through the back door, as such deals would be illegal since the company was under judicial management.
