Rosen files for bankruptcy

Lloyd Gumbo Senior Reporter
Harare businessman Mr Eric Rosen has been declared bankrupt after his company ran into debts and has been failing to settle statutory obligations. The company, Eric Rosen (Pvt) Ltd trading as Motor Action, filed for bankruptcy early this month as lawsuits and writs of execution threatened to ground the 30-year-old business. Mr Rosen and the company’s co-owner, his wife Elizabeth resolved to file for voluntary sequestration after suffering losses.

High Court Judge Justice Loice Matanda-Moyo granted Mr Rosen’s company a provisional liquidation order on Wednesday. In his founding affidavit, Mr Rosen attributes his company’s misfortune to dollarisation of the economy in 2009, bank loan to sponsor Motor Action Football Club’s participation at the CAF Championship and Confederation Cup and competition from cheaper imports of vehicle spare parts.

“The applicant (Eric Rosen Pvt Ltd) needed funds to recapitalise, and it had no access to affordable means of financial credit. Consequently the applicant had to seek capital through local banking institutions, which offered rather expensive interest rates. The situation was further complicated by the fact that applicant started facing stiff competition from Chinese supplies which offered similar products (albeit inferior in quality) but cheaper in price which was an incentive to the general public.” Mr Rosen said what also worsened the situation was a boom in the country’s informal sector which made trading even more difficult as the applicant was now competing with entities that had no overheads of taxes to pay. He said Motor Action Football Club performed well, which saw them winning various league titles, a development that meant they were supposed to compete at the taxing continental competitions.

“As a result, the applicant in the year 2011 took on a $200 000 bank loan payable over a three year period from ZB Bank, which was necessary to sponsor the team’s journey to CAF Championship and CAF Confederation Cup in Madagascar.

“The applicant further took on an additional loan for capitalisation purposes of the applicant’s business through various short-term loan facilities,” said Mr Rosen.
The firm managed to repay some of the loans but failed to settle about $46 000 leading to ZB Bank suing the company for the debt plus interest. Mr Rosen said his firm also failed to keep up to date with its statutory payments since 2012 owing Zimra over $80 000. Justice Matanda-Moyo last Wednesday ordered that Mr Rosen’s company be provisionally wound-up pending the granting of a final order as well as approving Mrs Grimmel as provisional liquidator.