Businessman and former SuperSport CEO Happy Ntshingila and entrepreneur Romeo Kumalo and their company Washirika 3 Oaks have failed in their bid to get Akani Properties liquidated.
On Wednesday, the Johannesburg High Court dismissed the application by Ntshingila and Kumalo’s company, with the costs of the application reserved for determination at the dispute resolution proceedings.
Ntshingila and Kumalo, through Washirika, took Akani to court in 2022, claiming Akani, which is owned by business mogul Zamani Letjane, was unable to pay its debt.
The liquidation application resulted from Washirika saying it had entered a “standard-form JBCC principal building agreement” with Akani between October and November 2020.
The deal entailed the refurbishment and renovation of a conference centre, boutique hotel, spa and wellness centre at the Radisson, Kempton Park, for an amount of more than R45-million. In terms of the contract, said Washirika, the amount was supposed to be paid in interim payments described in the interim payment certificate issued by Bentel Associates International (BAI) within seven calendar days of the date of issue of such a certificate.
Washirika’s application to wind up Akani came after Ntshingila and Kumalo accused Letjane’s company of failing to meet its financial obligations.
According to Washirika, it stipulated that a final payment certificate shall be issued by BAI, certifying 100% of the amount of the final account.
Washrika said since the commencement of the contract, Akani, which is a wing of Akani Retirement Fund, only made payments between December 28 2020, and November 8 2021. It then stopped making payments without the advancement of any apparent reason.
Johannesburg High Court Judge Willem Wepener stated in his ruling that it was a common cause that Akani failed to respond to the section 345 demand for payment and is consequently deemed to be insolvent.
“Akani sets out in detail why the delay in response to the section 345 demand should not be attributed to it, but came about as a result of certain errors. It is not in dispute that Akani disputed the debt prior to the section 345 notice.
“This dispute was raised both through correspondence and during personal engagements. W3O (Washirika) was, consequently, aware of the dispute before it sent out the section 345 notice.
“Akani and its attorney set out a unique confluence of events, which resulted in the failure to respond to the section 345 notice. The explanation is that Akani was served with a notice on 30 May 2022 care of an administrative clerk. Akani’s version is that it is not able to locate the notice, which did not reach the relevant individuals for attention at the time,” reads Wepener’s judgment.
Wepener also said in his judgment he was of the view that section 345 was intended to be the basis for establishing deemed insolvency in the case of a debtor who would not respond to a demand as it lacked any defence.
“This plainly is not the case in this matter. Akani could respond but indeed envisaged that the formal response would be sent by the attorneys who failed to do so due to the circumstances set out above.
“Indeed, Akani disputed its liability prior to the notice being sent. Regardless of the merits of the matter Akani has voluntarily ring-fenced the entire amount claimed by W3O plus interest by placing it in its attorney’s trust account and providing for a contractual release regime should W3O prove its debt. This must be considered as a factor in a case where liquidation is sought.
“In my view, this conduct negates any argument as to the commercial or factual insolvency of Akani. These funds have been ring-fenced for several months (close to two years) whilst Akani continued with its commercial activities. This speaks against Akani being insolvent. A court’s power to grant a winding up order has been held to be a discretionary power irrespective of the ground upon which the order is sought.
“Based on both the grounds set out above, I would exercise my discretion against the granting of an order for the liquidation of Akani,” reads Wepener’s judgment.
Washirika claimed Akani owed it more than R6-million in unpaid debt. Washirika further said after the breach, its lawyers addressed a letter of demand to Akani in January 2022, asking it to pay the outstanding amount within 10 working days. When Akani failed to remit payment, Wakashira said it terminated the contract in March in 2022.
Akani owns Autumn Leaf Mall in Zeerust, North West, where it had invested R500-million. Akani also acquired a R1.1-billion mall in Nicolway shopping centre in the affluent suburb of Bryanston, which has been renamed Winifred Mandela Precinct as well as the Glen Village Mall in Pretoria.
