'Indian firm's P10m claim against Pula Steel bogus'

Mbongeni Mguni | Friday May 24, 2019 13:15

 

Hindok Exports Limited, an Indian firm, had claimed that as far back as 2012, it supplied the steelmaker with critical equipment including two 15 tonne furnaces, 80 tonne weighbridge, power components and a crane. Hindok had claimed that as at December 31, 2018, it was owed $989,181 (P10.3 million).

The Indian firm claimed it had reservation of ownership over the property, meaning the property or its value would have to be excluded from the ongoing liquidation of Pula Steel.

The property claimed is essentially most of the installed plant structure presently on sale to investors, without which there is no business case for the offer to investors.

Hindok sued Pula Steel liquidator, John Hinchliffe, arguing for payment of the P10.3 million separate from other creditors’ claims.

In his judgement, Komboni said the evidence suggested there was foul play in the claim made by Hindok.

“I need to avert my mind to the two letters of December 20, 2014 (from Hindok), which purport to prove reservation of ownership in respect of almost the entire plant and the equipment purchased by Pula Steel from the applicant.

“The same letters only emerged in December after the first respondent (the liquidator) had advertised a sale of Pula Steel by tender.

“I am led to conclude that these letters of reservation of ownership are bogus as they never formed part of the documentation found by firstly the judicial manager and secondly by the liquidator amongst the records of Pula Steel,” Komboni said.

The judge found that directors of the Verma family, who founded Pula Steel and held a 22% stake by the time of its liquidation, had also never hinted a reservation of ownership by Hindok throughout the steelmakers’ days.

Ranvir Verma, Pula Steel’s former CEO, filed an affidavit in the case saying he was aware of Hindok’s reservation of ownership over the equipment.

“The fact that Ranvir Verma has bid through one of his companies which is represented by Pravda & Knowles for the sale of Pula Steel assets and at the same time has filed an affidavit confirming reservation of ownership by the applicant is strange and suspicious according to the first respondent,” Komboni said.

“Ranvir Verma from the board meetings that he attended as exhibited in the minutes filed by the first respondent, never at once mentioned the issue of reservation of ownership.”

Komboni said even if the two letters from Hindok were valid, the Indian firm would still lose its case because it had failed to show that the equipment had not been paid for and that it still held ownership of the assets.

He also agreed with the liquidator that Hindok had no right to bring the case to court, as the firm had not applied for leave to sue a company under liquidation.