adminHomage Funeral Services Company has closed some of its branches, including Fort Street branch in Bulawayo but workers, clients and policyholders were not notified.
Some of the clients are now being referred to the Kelvin North branch where there is a Provisional Liquidation Officer while funeral policyholders and some of the creditors like the National Social Security Authority which is owed $42 440 and Zimbabwe Revenue Authority ($16 000) by the company have not been updated about the development, according to court documents. Workers in Bulawayo received documents recently from Harare advising them about the judicial management but there was no mention of the policyholders who are understood to be still paying their monthly contributions. Homage Funeral Services has six branches and eight offices countrywide.
The funeral policyholders also include burial societies.
There are more than 30 burial societies, each with not less than 50 members and more than 50 individual funeral policyholders in Bulawayo alone.
Individuals pay $15 while burial societies pay $50 per month.
The directors, made up of Messrs Paxton Guvamombe Chivere, Eric Panganai Chivere, Mrs Tendai Merilyn Evans and Mrs Evelyn Wazara convened a special meeting on 7 March this year where they resolved that the statutory notice be waived and the company be wound up.
According to court documents, the directors made an application to the High Court in Harare, case Number HC4498/12 on 26 April this year seeking an order for liquidation and winding up the company.
However, this was without prior consultation with the workers and clients according to Section 243 of the Companies Act, Chapter 24:03.
The High Court granted the provisional liquidation. Thirteen employees in Harare led by Mr Asmon Koromora had filed an opposing affidavit.
Policyholders were reportedly not advised about the development while workers learnt about the issue through the Government Gazette as the company sought to be granted liquidation status.
The company is now placed under the provisional liquidation and Premus Executor Services Limited were named the provisional liquidator thereby leaving hundreds of funeral policyholders stranded.
Workers also fear the company, which was once dragged to court in Gweru last November for not paying salaries, wants to close down without giving them their outstanding salaries amounting to $159 789.54.
In the opposing affidavit, the workers submitted that they were opposed to the company being put under final liquidation preferring judicial management.
It is the workers’ contention that the Applicant (Homage Funeral Services) led by Mrs Evans failed to follow procedure in its application for voluntary winding up as provided for by the said section.
The statute specifies that workers should be consulted and given four weeks’ notice before the employer could embark on such a decision.
The workers contended that they instead learnt about the liquidation in the Government Gazette and “therefore the application is fatally irregular and should be given a fatal blow without even going to the merits of the case.”
It is also the workers’ contention that the directors misrepresented to the High Court that the company had no immovable assets and created artificial debts to inflate liabilities.
The company directors also allegedly misled creditors by claiming that they paid rentals in Gweru and Harare when in actual fact the company was using premises owned by a sister company, Open Heavens Trust whose directors are the same as those at Homage Funeral Services.
The properties were allegedly bought by the funeral services company for the sister company and workers allege that the directors have since transferred some of the funeral company’s property to Open Heavens Trust to avoid paying debts.
“Having said the above, we want to persuade the Honourable Court to grant an order of Judicial Management as opposed to winding up of company. We pray for the dismissal of the application for liquidation and be substituted by an order for judicial management,” submitted the workers on 24 July.
In the application, Mrs Evans stated that the company was struggling to stay afloat as liabilities were exceeding assets, which workers dispute.
The directors’ contention was that the company was not able to pay debts, no longer able to pursue the object to which it was created because of unviability of business.
A special resolution was made on 7 March to wind up the company so that the assets could be liquidated to provide for some equitable distribution to creditors.
However, the resolution did not include policyholders and clients as the company went on to advertise in the Government Gazette without their knowledge.
Online Reporter