BULAWAYO businessman Delma Lupepe’s business empire continues to collapse with two of his prime residential properties in Bulawayo set to go under the hammer next week over an outstanding debt with Premier Banking Corporation.
The financial institution recently obtained a writ of execution against Lupepe’s company, Merspin.
Lupepe, however, is not alone in the debt predicament. Many other businesses are closing shop or being placed under judicial management as the economy continues to decline.
Holland Auctioneers yesterday published a long list of fixed properties that will be auctioned in Bulawayo next Friday.
Lupepe’s woes come after some of his properties were auctioned last year to recover debts, but he once blamed banks for his financial predicament, saying the interest rates they charged were choking businesspeople.
In 2013, three financial institutions — Premier Banking Corporation, MBCA Bank and Interfin Merchant Bank — descended on three of his houses to recover undisclosed debts his companies owe.
The properties, one at No 73 Heyman Road in Suburbs in Bulawayo, was sold for $53 000, his flat at No 1201, 12th Floor, Kenilworth Flats at Ascot went for $55 000.
In 2011, the mogul was taken to court by Old Mutual Property Investments Corporation over a debt of $450 000 after his companies, Zimbabwe Express Services Limited and Merspin Limited, had failed to pay rentals.
He had running battles with his employees over failure to pay salaries, with arrears as high as $300 000.
Investigations in 2013 revealed that the registrar of companies was contemplating delisting his companies.
Merspin, a textile manufacturing company specialising in towelling, is understood to have borrowed $700 000 in 2009 from local banks at 35% interest, but the financial institutions were now demanding over $4 million, including interest charges as high as more than 500% per year.
Besides Merspin, Lupepe had diversified investments in Bulawayo that included companies in the manufacturing, telecommunications sector and ran a Premier Soccer League team, Amazulu.
At the same auction, beleaguered Zimbabwe Football Association (Zifa) and its chairman Cuthbert Dube will lose a building in Bulawayo for an unspecified debt to CBZ.
Zifa in the past three months lost some office furniture and other movable assets attached in relation to debts to various
service providers and dismissed workers.
This month, Dube had to renegotiate with the Deputy Sheriff, who had visited his house to attach household goods and vehicles in relation to a Zifa debt which he had guaranteed.
Economic analysts say in the prevailing conditions many companies may go under if interest rates remain high and business remains depressed due to liquidity crunch.
At the end of January the central bank said the country was experiencing negative inflation, which could lead to deflation.
Deflation is a term referring to low aggregate demand of goods as opposed to inflation where a lot of money chases a few goods.