Tannery liquidators in legal hot soup
Mpho Mokwape | Wednesday April 23, 2014 11:15
During the clash, the liquidators’, Munyaka Makuyana and Raja Gopal, who are attorneys, successfully convinced Justice Michael Mothobi to stay their prosecution in the matter in which creditors have inspired criminal charges alleging obstruction of judicial execution.The two voluntarily surrendered themselves to Naledi Police Station on March 6 after creditors, led by Southern African Furniture Manufacturers, accused them of obstructing judicial execution.
Documents before the court indicate that a disposal of TIB’s assets in 2013 realised P7.16 million of which P2.5 million was released to Southern African Furniture Manufacturers, which had applied for prioritisation as its own creditors “were beating down the door”.
After meetings between the liquidators, creditors and the Master of the High Court, a dispute arose over the final amount due to Southern African Furniture Manufacturers.
The aggrieved creditor claimed that the liquidators had obstructed judicial executions which would have released the funds they claimed to be owed as a result of TIB’s collapse.
Last week, Makuyana and Gopal sought a stay of prosecution from the criminal charges as well as several reliefs pertaining mainly to previous judicial executions secured by the creditors from court.
Mothobi granted the two attorney’s request for a stay and found that the liquidators’ application was rightfully before the court as the criminal charges were upon the two in their personal capacities.
“To this end, the court awaits written advice from the Attorney General, by consent, as to her deliberations,” he said, noting that state counsel had failed to appear before the court as requested.
Makuyana and Gopal however lost their application for the various reliefs, with Mothobi finding that the two liquidators do not have legal standing to seek what they wanted.
Specifically, the liquidators were found not to have legal standing to bring their applications in the name of TIB.
“This court will, so far as possible, jealously protect the interests of creditors and contributories when it is clear that liquidators have deviated from statutory duty.
“I say this because the first subsection of Section 387 (Companies Act) requires that immediately after a liquidators’ appointment, he or she shall open an account in the name of the company in liquidation with a bank within Botswana and shall deposit in it to the company’s credit from time to time, all moneys received by him or her on its behalf,” Mothobi said.
The status hearing in the case has been set for May 19.
Makuyana represented the applicants, who included TIB, while Kgalalelo Monthe represents Southern African Furniture Manufactures and other creditors.
TIB was a leather-processing firm set up as a joint venture between two Batswana, two Bulgarians, CEDA Venture Capital Fund and Botswana Development Corporation. The firm ran two operations; a re-tanning plant in Lobatse and a Phakalane finishing plant.