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MBABANE – The effects of the COVID-19 pandemic and owing the taxman millions of Emalangeni have seen two companies approaching the High Court for liquidation.
Liquidation is the process of bringing a business to an end and distributing its assets to claimants.
The two companies are BOMGI Farm (Proprietary) Limited and Infinity Investments (Proprietary) Limited. The two companies were in the business of rearing and selling chickens. In the application for liquidation of BOMGI Farm (Proprietary) Limited, the shareholder of the company Zethu Nyoni deposed to an affidavit where she stated that the shareholder was her and Mduduzi Nyoni.
She informed the court that the company was insolvent in terms of the Company Act 2009, as it was unable to pay its debts.
Exacerbated
“The situation has been exacerbated by the Coronavirus pandemic such that the company is no longer receiving clients to keep it afloat. It has not been able to pay salaries since the lockdown was announced and before that period,” submitted Zethu.
She averred that it would be unlawful for the directors to continue trading as they would be exposing the company to further debts and liabilities. According to Zethu, the company was aware that it was incapable of satisfying its liabilities.
“Your petitioner (company) is indebted to a number of creditors the sum in excess of E11 million. Specifically, the company is indebted to
Eswatini Revenue Authority (service) in the sum of E11 442 394.81. It is also indebted to its shareholders, in respect to a shareholders loan in the amount of E2 million,” submitted the shareholder. She further brought it to the attention of the court that, the company was unable to pay its employees and its suppliers until it closed shop. Zethu went on to submit that the company had not been trading ever since, but the normal liquidation processes were not completed to properly wind it up.
“The company has been under the impression that ceasing operations was enough, until it got proper legal advice. As at date hereof, your petitioner is truly indebted to its creditors in excess sum of E11 million for which it is unable to pay,” she argued.
Liquidation
Zethu also deposed to an affidavit in the application for liquidation of Infinity Investments (Proprietary) Limited. She informed the court that the company was indebted to a number of creditors in the sum of E7 million. According to Zethu the company was indebted to Eswatini Revenue Authority (service) in the sum of E7 759 417.78 and was owing its shareholders in respect of a shareholders loan a sum of E1 million.
It was further her submission that, the company’s conduct of stopping business operations deemed it prudent to lodge the application for liquidation and appointment of a liquidator. Lawyer Siyabonga Mzwakhe Zwane has been appointed the provisional liquidator of the two companies.