More firms go under administration as economy groans

The High Court has placed three firms in key industries under judicial management and provisional liquidation as the economic slowdown continues to stalk companies grappling with reduced capacity and debt.

Bulawayo-based tannery Wet Blue Industries and Lowveld cotton ginner, Romsdal Investments were last week placed under provisional judicial management while deregistered insurer Jupiter Insurance was placed under provisional liquidation.

The Insurance and Pension Commission (IPEC) deregistered Jupiter, along with the Agricultural Insurance Company, SFG Insurance Company and Suremed Health Insurance Company after they failed to meet new capital requirements.

Last year, IPEC doubled the minimum capital requirements for the sector, with short-term insurers required to achieve a minimum capital level of $1.5 million and life assurers having to put up $2 million.

According to the Registrar of the High Court, shareholders of Jupiter approached the court seeking an order to be placed under final liquidation, pending winding up of operations.

However the court placed it under provisional liquidation to allow those opposed to the move to file their arguments before October 3.

Cecil Madondo of Tudor House Consultant has been appointed provisional liquidator.

Jupiter was first de-registered in May 2010 after it failed to meet capital minimum requirements of $300 000 for short-terms insurance companies in accordance with Statutory Instrument 183 of 2009.

The company was subsequently re-registered in 2011 but was deregistered again in 2012 over solvency issues.

The court has also placed Bulawayo tannery Wet Blue Industries under provisional judicial management after the business went down following Cold Storage Company’s demise.

Shareholders wanted the company to be placed under final liquidation but the court gave a time frame to allow creditors and shareholders opposing the move to come forward.

Wet Blue Industries was one of the biggest tannery companies in Zimbabwe, processing between 18-25 tonnes of leather per month for export on behalf of CSC which used to be country’s biggest abattoir.

But the state-owned meat processor is saddled with a $22 million debt and owes workers $2.1 million in outstanding salaries. It requires $50 million to revive operations.

Romsdal Investments has also been placed under provisional judiciary management pending approval from creditors and shareholders.

Arafas Matausi Gwarazimba of AMG Global Chartered Accountants has been appointed the provisional judicial manager.

The company runs a cotton ginnery in Triangle in the Lowveld but reduced cotton production has seen capacity going down.- The Source

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