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Fidelis Munyoro Chief Court Reporter
Navistar Insurance Brokers that was involved in an insurance deal that prejudiced national airline Air Zimbabwe of more than US$11 million has been temporarily placed under judicial management since its three directors – Vukile Hlupo, Givemore Nderere and Orten Mawire – are facing charges of defrauding Air Zimbabwe.

They are out on bail pending trial.

They allegedly connived with Airzim bosses Grace Pfumbidzayi and Innocent Mavhunga to inflate insurance premiums to be paid by the national airline to international insurance brokers, thereby prejudicing the airline of millions of dollars.

Since the scandal was unearthed early this year, the company has been failing to meet its obligations and also due to mismanagement of its affairs by its managers.

Its involvement in the deal with Airzim earned it negative publicity and eventual suspension of its operating licence by the Insurance and Pensions Commission (IPEC).

This resulted in client flight and tight cash flows. To safeguard the interests of creditors, Navistar board resolved to approach the High Court and have the operating licence’s suspension lifted for it to trade and be in a position to pay creditors.

Through its lawyer, Mr Clement Kwirira of Magwaliba and Kwirira Legal Practitioners, Navistar last week successfully applied before Justice November Mtshiya to have the company provisionally placed under judicial management.

In his papers filed at the High Court, Navistar Insurance Brokers co-director Hlupo said the board resolved to place the company under voluntary judicial management because the managers had failed to steer the company.

He also cited mismanagement, resignation and absenteeism of managers and directors as some of the reasons why the company failed to perform this year.

“As a result of mismanagement, the company is now indebted to various creditors, which it is unable to pay,” said Hlupo.

“Further, the Insurance and Pensions Commission, which regulates the conduct of insurers and insurance brokers, has since written to the applicant directing it to suspend operations.”

He said the company still had tremendous prospects of success to be revived and start to operate viably if a proper management structure is put in place.

The company’s balance sheet as at December 31 2013 showed that its total liabilities stood at US$1 549 159, 57 while its total assets were at US$1 549 159,57 of which US$1 265 423,50 was the amount owed by debtors.

Hlupo said some of the creditors have obtained High Court judgment against the company and there was need for the situation to be contained, since the company had great potential.

“It is clear the company is unable to pay its debts and needs some revamping,” said Hlupo adding: “The company has, therefore, resolved by special resolution to wind up its affairs.”

The company also proposed to have Dr Wesley Simba Sibanda of WELSA International Chartered Accountants to be appointed the provisional judicial manager.