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Business Correspondent
THE High Court of Zimbabwe yesterday expressed concern over companies abusing the judicial system by applying for provisional judicial management but taking time to appoint a judicial manager or liquidator. Officially opening the 2014 legal year in Bulawayo, Judge President Justice George Chiweshe said applications for judicial management were on the rise with some companies abusing the system.
“Owing to harsh economic conditions many companies are struggling to survive. Applications for judicial management are on the rise.
However, some companies are abusing this process. It is now common for companies under distress to file applications for provisional judicial management or liquidation. Thereafter they do nothing to ensure that a judicial manager or liquidator is appointed,” said Justice Chiweshe.
He said the High Court had stamped its authority and had instructed the Master to resolve the issue.
“The Master has been directed to clean up the mess,” Justice Chiweshe said.
Last year several companies in Bulawayo were placed under judicial management while three others were in liquidation.
Geozing Pawn Brokers, Duze Oil and Walters Bakery were put in liquidation last year while Ocean Park, trading as Tashas Supermarkets, Partec, Polyfoil Zim, Paramount Motors, Totamela Enterprises, Apple Groove Invest, and Lazen Bury Engineering were placed under judicial management during the same period.
At the beginning of last year, the High Court revealed that about 20 firms in Bulawayo had been placed under judicial management since 2010 while 10 others were in liquidation.
Textile giant National Blankets, Tabs-Avon Lighting, Asmara, Belmont Leather, Textile Mills, Security Mills, and Archer Clothing are some of the companies that were placed under judicial management in the past five years.
Bulawayo, once industrial hub of Zimbabwe, has in recent years suffered arguably the worst de-industrialisation compared to other parts of the country due to liquidity constraints.
Obsolete equipment and power shortage are some of the fundamentals challenges that have affected operations of companies in the city.
Online Reporter