Knives out for DWT judicial manager

13 Feb, 2020 - 00:02 0 Views
Knives out for DWT judicial manager

The Herald

Cletus Mushanawani
The battle for control of David Whitehead (Private) Ltd has spilled into the High Court with one of the shareholders applying for the removal of the judicial manager accusing him of selling the company’s majority shares to one of the secured creditors.

Mr Edwin Chimanye is seeking the removal of Mr Knowledge Hofisi, the judicial manager since 2014 when he took over from the first judicial manager, alleging that he poses a serious threat to the creditors and debtors of David Whitehead.

Mr Chimanye argues that Mr Hofisi had no business to make the deal with Agri Value Chain Zimbabwe, a company linked to Parrogate, David Whitehead’s largest secured creditor, which initially bought a 51 percent stake in the textile firm for $5,4 million.

Agri Value Chain has since increased its shareholding in David Whitehead to 66 percent after some of the shareholders opted to dispose of their shares to its director, Mr Praduman Ganeiwal, resulting in the new investor settling some of the pre-commencement debts.

Among the creditors paid so far are Zimbabwe Asset Management Company ($2 129 914), Zimbabwe Revenue Authority ($538 638), Zimbabwe Electricity Transmission and Distribution Company ($1 017 827), Master of the High Court ($466 379) and National Social Security Authority                                       ($279 014).

About 70 percent of the workforce has had its outstanding wages paid off.

Agri Value Chain representative Mr Phanuel Moyo confirmed the increase in the company’s stake in David Whitehead and said they were bringing in full beneficiation to the cotton processing chain.

“The new investor in David Whitehead, Mr Ganediwal, is the family’s fourth generation in the textile industry, which started in India in the 1850s.

“He is well invested here through Zimgold and Agri Value Chain, which took over Cargill operations in Zimbabwe and is committed in seeing the company operating at full throttle with massive investment in new technology,” he said.

While David Whitehead is operating on an on-and-off basis, Mr Chimanye — in his chamber application to the High Court dated December 12, 2019 — argued that since his appointment as judicial manager in 2014, Mr Hofisi had not done a proper job and should go.

“I wish to apply for the removal of the first respondent (Mr Hofisi) from office as the judicial manager of the second respondent (David Whitehead).

“The first respondent, since his appointment, has not conducted himself in a manner that demonstrates any intention to save the second respondent from liquidation.

“In carrying out his mandate as the judicial manager, he has acted in contravention of the law and has demonstrated his great incompetence,” read part of his application.

“In December 2015, Air Force of Zimbabwe made payment of the sum of US$46 000 as deposit for camouflage fabric. US$39 000 was withdrawn during the holiday period and was not used towards procuring raw material to supply the order. This resulted in a three-year delay in the completion of supplying the said client with the order.

“In 2017, the Zimbabwe Defence Forces prepaid for the supply of 60 000 metres of camouflage fabric, as at the date of executing this affidavit, the delivery of that has not been completed.

“In May 2018, the Zimbabwe Republic Police prepaid US$368 000 for the supply of 60 000 metres of fabric, 40 000 metres is yet to be supplied.”

David Whitehead operations manager Mr Tendai Chetse acknowledged the outstanding orders and said with the coming in of the new investors, they would address the issue.

“Some of the machines here are now old and cannot produce efficiently compared to other factories around the globe,” he said.

When approached for a comment, Mr Hofisi said he had been advised by his legal advisers not to comment on an issue which is still pending before the courts.

David Whitehead was easily the largest textile company in Zimbabwe before it almost collapsed under debt some years ago and was forced into judicial management.

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