16 January 2013

Zimbabwe: Jaggers Liquidation Enters Final Stage

JW JAGGERS Wholesalers and its subsidiary Jaggers & Trador have been placed under final liquidation by the High court.

Justice Patel granted the order in default on November 1, 2012 through confirmation of the provisional order of liquidation by Justice Makoni.

The group owes more than US$13 million to creditors.

The granting of a final order of liquidation brings relief to a lot of creditors especially property owners who are owed rentals dating back to 2009.

Marondera Foundry Manufacturers (Private) Limited represented by Claudius Nhemwa of C.Nhemwa & Associates applied to the High court for the liquidation of Jaggers.

However, Jaggers, through its lawyers, Khanda & Company, filed an application for rescission of that judgment which was opposed.

The second and final creditors' meeting is now scheduled for January 30, 2013 after which the Liquidators, Reggie Saruchera of Grant Thornton Camelsa, will proceed to sell Jaggers' remaining assets and pay off creditors.

In his affidavit filed with the High court, Cecil Muderede, the majority shareholder in Jaggers through his investment firm Borlscade Investments (Private) Limited, wrote: "Sometime in October 2012, I was advised by an official of the provisional liquidator that 1st Respondent (Marondera Foundry Manufacturing) had set the 2nd of November for the final liquidation. On the 25th of October 2012 my attorneys of record contacted Advocate Thabani Mpofu who advised that he was engaged for the next three weeks. It was agreed to seek a postponement of the matter on account of the Advocate's absence. On the 1st of November 2012 around 11:00hrs I received a phone call from an employee of 1st Applicant (Jaggers) who happened to be at the High court on other business that the case had been heard and an order had been granted in default".

Muderede added: "I submit that clearly the default by my attorneys was not willful but the result of misinformation for which I am partly to blame. On a balance of probability, I submit that it would be just and fair for all parties concerned for the order for final liquidation granted on the 1st of November 2012 to be rescinded and be granted one last opportunity to secure an investor."

Marondera Foundry Manufacturers opposed the application to defer the liquidation.

"A shareholder (Muderede) is not clothed with locus standi to institute proceedings on behalf of a company which is a separate legal persona. The application does not affect only the 1st respondent (Marondera Foundry

Manufacturers) but all creditors who have for the past 24 months lost a lot of money as Muderede threw spanners in the way to prevent the resolution of this matter. The judgment of Justice Patel was not only a default judgment but his lordship proceeded to determine the matter on its merits. Therefore Jaggers used the wrong procedure as the High Court cannot revisit the same matter on merits. The Respondent (Muderede) is also peddling falsehoods when he alleges that he was advised by an employee of his company that an order had been granted in default by 11:00am on the 1st of November 2012. The matter was the last on the opposed roll of that day and his lordship Patel J only started hearing the matter at about 12:30hrs and granted the order well after 13:13:00hrs.The Applicant's (Jaggers) case is frivolous as it is clear that they acknowledge that the applicants are insolvent and that the request is for an extension of the provisional order to allow the applicants to make a last ditch effort to secure an investor. This does not require a rescission of judgment but an arrangement with the creditors through the liquidator. It was established on merits that the Applicant's (Jaggers) total liabilies are over US$13 million, with an asset base of about US$3 million," Tanyaradzwa Chinamo, a director at Marondera Foundry Manufacturers, said in his opposing affidavit.

Muderede acquired Jaggers in 2010 from South Africa's Metcash.

In 2011, Jaggers' assets went under the hammer to pay off US$443 795 that the company owed to Delta Beverages.

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