Court Orders Winding-Up Of Pule Modisana
Goitsemodimo Kaelo | Monday June 22, 2020 16:45
High Court placed the company under provisional winding up in 2018 following a petition by Citizen Entrepreneurial Development Agency (CEDA), which had bought a 40% stake in the company at a cost of P16,934,712.
However, in 2018 CEDA approached the High Court to place Pule Modisana Holdings (Pty) Ltd under provisional wound up.
CEDA contended that Pule Modisana has failed to comply with the Companies Act in that it did not hold an annual general meeting of shareholders since 2014 having failed to issue audited financial statements since 2012, it has failed to appoint an auditor, it has failed to file financial statements at the Registrar of Companies and Intellectual Property (now Companies and Intellectual Property Authority), as well as failed to prepare and produce an annual report. The provisional order was confirmed Friday, with the judge finding that it is just and equitable that the company be wound up. Judge Gabanagae ordered the respondent to also pay the costs of suit.
Gabanagae agreed with CEDA that the net asset value of Pule Modisana Holdings (Pty) Ltd reflects a clear state that the company does not pass the solvency test.
“I agree with the petitioner’s submission that the effect of the above is that the respondent is factually and commercially insolvent. It cannot meet its short-term liabilities,” reasoned Gabanagae in his ruling.He further said for the company to have failed to comply with the provisions of the Act, it is just and equitable, in the broad and general sense that the provisional winding-up order be confirmed. He explained that the commercial insolvency of the company lies in the fact that its liabilities far exceed its current assets.
The company’s balance sheet for 2014 shows current assets in the sum of P1,024,934 less current liabilities in the sum of P7,618,606, thus current liabilities far exceeded current assets. The judge also ruled that there was no remedy available to CEDA, which had invested public funds in the company. Pule Modisana Holdings (Pty) Ltd also owns Pule Funeral Services (Pty) Ltd, Pule Insurance Agencies (Pty) Ltd and Pule Coffins Manufacturers (Pty) Ltd.