By Oliver Kazunga Bulawayo Bureau
MERLIN Limited judicial manager Mr Cecil Madondo is seeking re-engagement with the Zimbabwe Asset Management Company (Zamco) for the disbursement of $5 million it requires to pay its creditors.
In the provisional order granted on November 8, 2018 under case number 2724/18, Justice Martin Makonese ruled that the judgment of the court in HC 2353/11 which placed Merlin under judicial management did not in any way affect the status of Merspin Limited.
The provisional order was granted by the High Court after noting that Merlin had been placed under judicial management despite being dormant and not having creditors.
Prominent Bulawayo businessman Mr Delma Lupepe owns the city’s two former textile giants through Maydeep Investments.
Following the High Court ruling, Mr Madondo has filed an appeal to the Supreme Court under case number SC 866/18 arguing that Merlin and Merspin’s operations were intertwined and interrelated and thus the two textile firms have shared creditors and employees who were paid from the same pocket.
Recently, Mr Madondo also wrote to the Ministry of Industry, Commerce and Enterprise Development highlighting that as a result of the High Court ruling, one of their major creditors, Old Mutual, had activated an eviction order and writ which the creditor obtained before Merlin was placed under judicial management.
“Old Mutual took advantage and activated an eviction order and writ which they had obtained before judicial management. The sheriff was ordered to attach the assets, evict and sale in execution.
“The sheriff proceeded to attach the assets and locked the factory stopping all the production that was taking place,” said Mr Madondo in a correspondence seen by this paper, written to the Ministry of Industry, Commerce and Enterprise Development principal economist, Mr Isaac Zindove.
“The shareholders filed and unprocedurally obtained a court order notwithstanding our joint meeting and agreement on the 9th of August, 2018 declaring that Merspin was not under judicial management,” said Mr Madondo.
He said in terms of the consent order granted in this matter, the parties had been given up to February 28 to resolve the impasse, failure to which would see the sheriff proceeding to action.
“If the issue remains unresolved, this will be the demise of Merlin.
“We therefore request that you call for an urgent meeting with Zamco to persuade them to release the funds in terms of Section 307 (2) of the Companies Act (chapter 24:03) which can be used to settle the debt to Old Mutual and save assets from being sold,” he said.
In his response to the concerns raised by Mr Madondo, the principal economist said his Ministry would allow the law to take its course until the end of February 2019.
“With respect to the issue of Merlin, I request you to write a formal note explaining your differences with Mr Delma Lupepe as regards the failure to access the $5 million with Zamco. This will help us call a meeting to try and resolve the issue.
“We do not wish to call a meeting on the basis of hearsay because nobody has actually written to us formally about your misunderstandings,” said Mr Zindove.
Last year, Merspin shareholders engaged Zamco to takeover its $5 million debt before new investors can pump in fresh capital into the textile concern. Zamco is a special purpose vehicle that was created by the Reserve Bank of Zimbabwe in 2014 to absorb non-performing loans after an insidious culture of dishonouring credit obligations took root, choking banking institutions from providing fresh loans to the market.
source: the herald