Properties sold for a song

Senior Reporter
A PUBLIC auction of property belonging to 13 Bulawayo companies and businesspeople held on Friday was “marred” by low bids while some of the items on sale had no takers. The Sheriff of the High Court sanctioned the sale of property worth millions of dollars belonging to the city’s ailing firms over failure to service loans owed to different financial institutions.

The auctioneer, Mr Michael Nekati, who is also managing director of the Bulawayo Real Estate, told Chronicle that the bids for the properties were so low that there were fears that the Sheriff might not sanction them.

“The attendance was fair but there was a challenge of liquidity. Most properties were sold while some, about five or so had no takers, especially those situated outside Bulawayo,” said Mr Nekati.

“The bids were so low in relation to the property value and there is a possibility that the Sheriff might not approve the sale at all. I think the banks might consider refinancing some of the bidders.”

Mr Nekati, a member of the Master of the High Court Panel of Valuers and Auctioneers, could not be drawn to disclose the details of the bids saying he was supposed to write a report of the auction to the Sheriff first.
He also said some of the auctions were withdrawn.

“About four auctions were withdrawn after the debtors made payment arrangements with the creditors. I will be writing a report about the sale, which I have to send to the Sheriff for approval within seven to 14 days,” said Mr Nekati.

The media was barred from covering the auction at a local hotel where immovable properties that included commercial buildings, houses and housing stands were sold.

However, proceedings almost came to a halt after officials from the Affirmative Action Group (AAG) bulldozed their way into the hotel.
Mr Nekati had a heated exchange of  words with AAG deputy president Mr Sam Ncube who claimed that he was granted permission by the Bulawayo Central police to observe the proceedings.

“I was attacked by the auctioneer who blocked me from observing the auction until I got clearance from the police. Mr Nekati said I should be kicked out of the meeting yet I was there to observe and I am not a law breaker,” said Mr Ncube.

“We have said it was not good to sell people’s property when the economy is like this. Eventually I remained in the room but the bidders had lost interest in the auction after that incident.”

In response Mr Nekati accused Mr Ncube of disrupting proceedings and attempting to block the auction through threatening statements in the media.

“AAG people came and tried to interrupt the sale. I told them that as a pressure group they should use proper channels if they have objections and that the sale was sanctioned by the High Court and could not be stopped by an individual,” said Mr Nekati.

He said what AAG did was tantamount to contempt of court, adding that the monies in question were depositors’ funds that need to be paid.

“These are industrial matters and the companies entered into an agreement with banks. We are all victims of the economic collapse and AAG should know that the Sheriff does not deal with banks alone.

“They should not use threats to promote lawlessness. What they are doing makes Bulawayo to be deemed an unsafe investment destination where businesses borrow and never pay back.”

The companies owe substantial amounts in loans to financial institutions that include Renaissance Merchant Bank, Premier Banking Corporation, Interfin Merchant Bank, Infrastructure Development Bank of Zimbabwe (IDBZ), POSB, ZB Bank, NMB Bank, Ecobank Zimbabwe, CBZ Bank, Multrige Finance, MBCA Bank and CABS.

Economists have said companies were failing to service their debts because they were under-capitalised and warned that continued company litigations would result in more company closures and loss of jobs.

There have also been calls for a moratorium on litigations until the economy stabilises with the Government being urged to craft a policy directive to solve the impasse.

The country has experienced a massive closure of industries in the last decade with Bulawayo being the major casualty with nearly 100 closed companies.