GUMA fights liquidation of URB

• URB owes creditors P100m • Unibulk wants its P22m • Moyo company is insolvent • The former MP blames COVID-19

GUMA fights liquidation  of URB

Self–exiled politician-cum-businessman Samson Moyo Guma’s company is allegedly broke and is failing to pay creditors who want to recover their money by liquidating the company, United Refineries Botswana (Pty) Ltd, that long ceased operating in 2017 with employees owed their salaries, The Business Weekly & Review has established.

Sources say when the former MP for Tati West moved to place his company URB under judicial management, it was a ploy to avoid paying creditors who were demanding what they were owed.

Court papers show that Moyo’s company owes a total of P100 million while its assets are not worth much. Available court records show that the former stalwart of the Botswana Democratic Party (BDP) who is now a member of the Botswana Patriotic Front (BPF) is entangled in a wrangle with one such creditor, Unibulk Botswana (Proprietary) Limited, over P22 million owed.

In papers filed before court, the Managing Director of Unibulk, Fred Buzeidenhuit, says the judicial manager did not oppose the current application but expresses concern that he filed a confirmatory affidavit in favour of Moyo who asserts that a rule nisi (court order) placing URB under judicial management was granted in February 2019 but effected in September 2019.

But Buzeidenhuit argues that the troubled former MP’s reasoning is “lame.” According to the Unibulk MD, the judicial manager has occupied office for over eight months but has not made any significant progress despite his appointment having been confirmed in September 2019.

According to Unibulk’s replying affidavit to Moyo’s filing notice, “the deponent would have the court accept a lame preposition such as that when the court grants a rule nisi as it did on 11 February 2019, until September 2019, the judicial manager could not do much,” reads the affidavit. “Accordingly, the court is being asked by the deponent to view judicial management as having effectively commenced after 20 September 2019.”

Unibulk contents that there is no hope for restoring URB to viability despite Moyo’s desire to have it under judicial management. He argues that the company was not operational for a long time and that the judicial management order was sought after it shut down in December 2017.

Unibulk maintains that since granting of the judicial management order, the company (URB) operations never resumed and that the care and maintenance of assets was never implemented as per a compromise reached when the company was initially placed under judicial care.

The creditor, who seek their P22 million, says it is immaterial for Moyo to make averments that his company is a large enterprise when it has not traded since 2017. He denies that the business grew exponentially as asserted by Moyo.

Even though Moyo, who purports that he is in exile in South Africa, says the judicial manager was constrained by the advent of COVID-19 as he works in Gaborone while the business is in Francistown, the Unibulk MD insists that the judicial manager produced the first report on 25 April 2019 before confirmation of the judicial management order.

According to Buzeindehut, URB has no funds to secure its plant and machinery. And it is therefore against such a background that he wants the company liquidated so that creditors may receive what is due to them.

The aggrieved creditor believes judicial management failed to commence in two years and that the reasons advanced by Moyo that the COVID-19 affected business operations and the judicial manager’s work is a laughable fallacy.

Represented by Tumelo Mabale, the Unibalk MD’s affidavit states that there is no hope of turning the business around, hence the need to recover their money. He says he believes the judicial manager’s revelations that nothing has happened from 2017 to-date, unless there are funds to place the plant and machinery under care and maintenance, is enough to suggest that there is no business plan in action to save the business.

It emerges that the P22 million was owed to Unibalk long before 2017.

Opposing the liquidation, Moyo had submitted that the outbreak of COVID-19 and ensuing lockdowns affected his operations. In a perplexing line of argument, Moyo’s affidavit states that over and above lockdowns, the State of Public Emergency (SoE) affected the business.

According to the former MP, the company was affected because there was no movement of goods around the world. Because of COVID-19, he says, it would have been difficult for the judicial manager to turn the business around.

 

In addition, Guma says the creditor (Unibulk) is trying to say the judicial manager has not been doing anything to save the business and denies that his company is “commercially and factually insolvent”. He seeks to refute assertions that he ignored Unibulk debts and confirms that when his company was placed under judicial there were already involved in litigation.

To sustain his line of argument, Moyo says it has been difficult for the judicial manager to organise a creditors meeting due to unavailability of the Master of the High Court and that the creditor is jumping the gun.