7 June 2013

Zimbabwe: Valley Tech Faces Liquidation

DEBT-RIDDEN Valley Technologies is facing liquidation after DHL Zimbabwe made an application at the High Court seeking the closure of the

company after it failed to pay more than US$40 000 it owed the freight company.

In September last year Valley Technologies headed by Spiritage Group chief executive officer Zachary Wazara was ordered to pay DHL US$41 000 but the company failed after its property was attached by other debtors.

Through their lawyers Gill, Godlonton and Gerrans, DHL wants the company to be liquidated in terms of the Insolvency Act (Chapter 6:04).

"The respondent has failed to pay the judgment debt indicated herein despite several demands made by the applicant for the said payment to be made. In the circumstances it is respectfully submitted that the respondent has committed an act of insolvency as envisaged by Section 11(f) of the Insolvency Act, and that the respondent is liable to be wound up by the court on the basis that it is unable to pay its debts as envisaged by Section 206 (f) of the companies.

"It is submitted that it is in the best interest of the creditors that the respondent be wound up. The appointment of a liquidator will enable the financial circumstances of the respondent to be investigated to ascertain and realise the assets of the respondent and to make a proper distribution of assets to creditors who may prove claims against the respondent," submitted DHL.

DHL wants Mr Winsley Militala to be appointed provisional liquidator.

The matter is expected to be this month.

Property belonging to Valley Technologies was under threat from various creditors including employees who had obtained a writ of execution against the property.

Kingdom Bank, being a major creditor of Valley Tech and a holder of various securities including notarial general covering bonds, moved in to perfect the security with the consent of Valley Tech.

The bank went on to place all assets of Valley Tech under judicial attachment meaning no other creditor could attach or remove the property in a bid to facilitate turnaround of the company through the creation of an entity called Lalela Trading.

The bank called its security after promoters of Valley Tech including Wazara failed or refused to meet conditions precedent to the agreement.

In another case Kingdom is pursuing Wazara's personal guarantee to recover a US$21 million extended to him in a credit facility and a further US$79 000 advanced to Wazara's E-Transact.

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