Closed firms owe local authority over $3,4m
MP in road accident
THE Bulawayo City Council has named 35 companies that were closed in the country’s second largest city in the past few years, adding that the firms have prejudiced the local authority of more than $3,4 million in unpaid rates.
It has also emerged that although the council has written off debts for some companies that were liquidated it has launched a blitz on owing residents by disconnecting water supplies and in some cases auctioning their houses and properties to recover their money.
According to the latest council report, the local authority has decided to cease a six percent per annum interest it was charging owing companies in an effort to recover the monies from the closed companies.
The 35 singled out closed companies share 78 accounts among them which owe a combined figure of $3 407 727.
National Blankets has the most accounts at nine, and owe the local authority $197 723. However, the highest owing company is Textile Mills that had three accounts and owed the local authority $418 180.
Zimbabwe Sugar Refineries had accounts and owe $397 292.
Other companies that owe the local authority are; Security Mills ($123 543), five Tabs Avon ($194 219), Merspin ($215 392), Cotton Printers ($90 910), Tagarira Brothers ($78 550), Footwear Rubber ($87 887), Bulawayo Tyre Services ($64 083), Archer Clothing ($47 095), Gekum Enterprises ($17 607), Radiator and Tinning ($37 829), PG Industries ($16 820), Vitafoam ($14 036), DST Private Limited ($2 954) and Harrowgate $6 733.
Other companies with just a single account each which are owing the local authority include Native Investments ($378 215), Geddes Limited ($146 038), Zimbabwe Saints Football Club ($67 358), Trust Bank ($54 664), ABC Asset Management ($20 250), Wet Blue Enterprises ($105 998), Stanchem ($70 902), Blue Ribbon Foods ($11 703), Alco Forest Industries ($83 257), Bateman Dental Supply ($798), Morewear Industries ($24 294), More Steel ($168 146), Gulliver ($468), Securitas ($2 901) and Bolt Manufacturers $11 271.
According to the latest council report, the local authority has instructed its information and technology department to stop effecting the six percent annum increase on these companies noting that their reopening chances were quite bleak.
“The accounts were currently accruing interest at six percent per annum and prospects of recovering the outstanding balances were not good at all. It would be prudent in terms of accounting not to accrue interest on these accounts.
“The acting financial director therefore recommended that the accrual of interest on the listed accounts be stopped immediately and that the Information Technology manager assists in this regard,” reads part of the report.
The report further reads that the local authority was in the process of engaging lawyers on the best avenues to be taken to recover what was owed to them by the closed or liquidated companies.
Contained in the same report is that the local authority on Wednesday passed a resolution for the writing off of a $1 944 debt owed to them by R Chitrin which recently liquidated.
“The Financial Services Department was advised by the Chamber Secretary’s Legal Section in a memorandum dated 7 February 2017 that the above company was liquidated in January 2014 and according to the liquidator’s report only Zimra and secured creditors got their shares. There were no further funds to distribute to the rest of the creditors Council included.
“It was recommended therefore that the amount of $2 411 on account 20165062 as at 31 January 2017 be written off. As the account was a water account council had secured a deposit of $488, the account accrued interest of $21 in the interim. That added to the balance as at 31 January 2017 against the deposit of $488 resulted in a figure of $1 944 to be written off,” reads the report.
In the same report it was further reported that another company, Musimboti Enterprises, that had been handed over to council lawyers; Dube-Banda and Partners in 2015 for a $73 733 had since approached the local authority offering four stands at Marvel Medium Density suburb to cover their debt.
However, the stands would not be able to cater for the entire debt as they were not serviced and they had no title deeds leading the city’s valuer to rate them at $8 000 each.
“The city valuer in his memorandum dated 27 September 2016 advised that the four stands were not serviced and their combined value was $32 000 meaning that each stand was currently valued at $8 000. Musimboti Enterprises in their letter dated 6 April 2017 accepted the value of $8 000 per stand.
“However, the city valuer (further) pointed out that the stands had no title deeds and as such there would be challenges in the transfer of the same to council. If council accepted the offer of the stands as part payment of outstanding rates then the offeree, Musimboti Enterprises should be able to cause the transfer of stands to council possible,” reads the report.
Another institution, Bulawayo Publicity Association, also wrote to the local authority requesting a waiver of interest to what they owed the local authority noting that they were only able to pay the principle debt due to a number of financial constraints.
The local authority however, turned down this request arguing that it would set the wrong precedence.
“This association’s finances are in a parlous state owing to the theft of all its finances by its bookkeeper, Miss Jackie Kennedy which involved keeping for herself the money she had stated that she was paying each month to the city council for water and rent.
“Since her disappearance at the end of October 2016 we have been trying to pay off the debt to yourselves but although the basic amount has been paid, we have not taken into account the interest due. We are appealing to council to be kind enough to waive the interest each month on our account. This would help us tremendously,” reads a letter from the association’s director Mrs Vivian Bell.
e association owes the local authority $21 896 of which $20 101 is for the accrued charges while the interest charged amounted to $1 795.
Over the past few years it has been reported that close to 100 companies closed in Bulawayo with more than 20 000 jobs lost due to the closure or relocation of these companies.
The council has since last month embarked on a massive disconnection of water supplies to residents owing the local authority $300 despite a Harare High Court ruling which upheld previous rulings that disconnecting water supplies is illegal without a court order. NATIONAL Assembly member for Binga South Mr Gabbuza Joel Gabbuza (MDC-T) was on Friday evening involved in an accident which left him nursing minor injuries while two other people including a female ambulance driver were seriously injured.
The accident occurred around 6pm about 20km after Shangani towards Mbembesi area after a heavy vehicle ploughed into a herd of cattle hitting some and scattering others all over the road. That led to a pile-up which resulted in a head-on collision between an ambulance and a Land Cruiser seriously injuring the two drivers.
Mr Gabbuza said he then ploughed into some cattle that had been hit by a heavy vehicle that was going the opposite direction. Police in Midlands could not be reached for comment by the time of going to print but the legislator told the Sunday News yesterday that he escaped with minor injuries while the Ford Ranger vehicle he was driving was badly damaged. He said the injured female ambulance driver and the driver of a Land Cruiser were rushed to Gweru Provincial Hospital.
“I had no chance to avoid the animals but to plough into them since I was already at the bridge. Avoiding them would have meant that I plunge into the bridge. An ambulance going to Gweru driven by a woman had a serious head-on collision with a Land Cruiser resulting in the two drivers sustaining serious injuries,” said Mr Gabbuza.
He added: “We had to break the two cars to remove the drivers. I sustained minor injuries and I am home as I speak.”