A Joburg businessman has petitioned the Johannesburg High Court to reverse the liquidation of his company by former ANC treasurer-general Mathews Phosa and his co-liquidator Yunus Aboo Baker Ismail.
Phosa and Ismail were appointed as the final liquidators of Clive Desmond de Vos’s company, Street Spirit Trading.
De Vos cited Phosa and lsmail as the third respondent and second respondent respectively, while Joburg Master of the High Court, the Companies and Intellectual Properties Commission, and Absa were cited as the fourth defendant, fifth defendant and sixth defendant.
Street Spirit Trading, which owns a building that houses, among other entities, the popular Central College School in Alberton, has been wound up after allegedly failing to pay back the loan it secured from Absa to purchase the property.
In the court papers seen by Sunday World, De Vos stated that although the company was in financial distress, there were reasonable prospects of rescuing it instead of liquidating it.
He expressed his belief that placing the company under supervision would be financially equitable. If they fail to save the company, putting it under business supervision would yield a more favourable outcome for creditors than its immediate closure.
He said he believed that a duly qualified business rescue practitioner would be able to implement the business rescue plan or strategy.
“The rescue plan will probably be a long-term turnaround strategy that the company, if properly implemented, would not only be beneficial to the company but also to its creditors. The rescue of the company would also restore the employment of its employees and ensure the financial independence of the employee as well as their dependents,” he stated in the papers.
De Vos said the entity was provisionally liquidated by an order of the Johannesburg High Court on August 25, 2021, and thereafter finally wound up on October 26, 2021.
He said although Ismail and Phosa were appointed to liquidate his company, he had been blissfully unaware of its liquidation.
He said on or about January 12, 2022, Absa sent him an email confirming that the arrears on the bond were R2. 9-million and further enquired on how he planned to pay the arrears amount.
“Nothing was said about the company being in liquidation,” De Vos said in the court papers.
De Vos further said on or about January 18, 2022, he wrote back to Absa confirming that he would be able to pay monthly instalments starting in February 2022.
He said on or about January 25 last year, his company and the bank concluded a new plan to pay back the loan in over R104, 000 monthly instalments.
The bank also confirmed that he has already paid R1.3 million towards the bond.
De Vos stated that on or about May 14 this year, Absa froze the company’s account despite paying between R105, 000 and R115, 000 towards the bond every month.
After the bank froze the account, De Vos paid R140, 000 into the company’s bank account at the request of the appointed liquidators, and to date hereof, the amount is still sitting in the coffers.
Considering the fact that the company was finally wound up on or about October 26, 2021, and payments were made by Street Spirit Trading, indicates that dispositions have been made since its final winding up, he said.
De Vos stated that the company did not plunge into a financial quagmire because of mismanagement but because of Covid-19. He said prior to the pandemic, they operated a highly successful gym.
When the national Covid-19 lockdown was announced in March 2020, the gym operated by a company called Zorbyl, was obliged to cease its trading activities, and so was the private school operated by Central College School. As a result, Street Spirit’s tenants were unable to pay rent.
Consequently, the company’s cash flow became constrained, and it was unable to keep up with its monthly bond payments.
De Vos said cashflow had improved, and a profit of more than R29 000 was made before the taxation period ended May 31, 2024.
“The company, after all the expenses are deducted, earns a net profit of R29, 411,00,” he said.
He further stated that although the financial statements reflected the non-current assets at R6, 964 778.00, the immovable property of the company was worth R18-million.
What a useless article. Lazy journalism