Financial Crisis Mount For Cash-strapped Pula Steel
Lebogang Mosikare | Monday February 20, 2017 15:44
The company recently lost a case in which Alman Metals (PTY) LTD made an application for a summary judgement and an application in terms of Order 42 (12) (C) of the rules of the High Court. Alman instituted an action on July 5, 2016 in which it claimed payment of around P1,077,000 for scrap metals it sold to Pula Steel.
Francistown High Court judge, Barnabas Nyamadzabo said that in his view, there being no cogent evidence from the defendant’s attorneys to counter act the piece of evidence in the affidavit of service, it should be accepted that the defendant’s attorneys were duly served with the declaration as well as the summary of judgement application documents.
“The claim is the result of loads of steel products the plaintiff delivered and sold to the defendant between May and June in 2016, which are supported by weigh bridge ticket slips, delivery notes and tax invoices all from which the total sum of P1,077,282.82 can be determined…,” said Nyamadzabo.
“As stated previously, this is a case where the defendant ought to have filed a defence (in the form of a plea) if it so wished from September 14, 2016 after service. The fact that even to this day such defence has not been filed should speak volumes on whether there is any genuine defence to the summary judgement application and failure to file any opposing papers to the summary judgement application itself was the final nail on the defendant’s coffin,” said Nyamadzabo. The result, he noted, is that the application for the summary judgement succeeds with costs against the defendant.
“As regards to the second application, this was an alternative in the event the relief for the summary judgement did not succeed. In the result it is academic to deal with such an application. It is ordered that the judgement be ordered and granted in the plaintiff’s favour in terms of the draft order filed of record,” said Nyamadzabo.
Pula Steel has been dogged by financial problems.
At the beginning of Feb., The Monitor reported that, in a comical situation, Pula Steel employees held the company CEO, Ranvir Kumar Virma hostage inside a tightly packed and stuffy conference room demanding their salaries. They also ordered the CEO to resign forthwith. The fed up employees have not received their December salaries in full as well as those for January.
What irked them the most was that the CEO wrote them letters assuring them of payment of all their dues on the last day of January, but that did not happen. On the other hand, Virma explained that there had been financial challenges because the company does not have working capital and that they are still waiting for CEDA, which is one of the shareholders, to release some funds. He said there has been a delay by CEDA.
“We have a lot of liabilities. We tried to operate the plant, but BPC switched off power in November,” he said. Pula Steel has been mired by challenges shortly after it commenced production. Last year, it was closed down for about two months for failure to comply with the pollution control standards.
Its fleet has been impounded by sheriffs for failure to pay some local suppliers, a debt over P1 million while Botswana Power Corporation (BPC) disconnected its power supply to the plant in November last year. The applicant was represented by K. A Lekang while Kagiso Jani stood for the defendant.