DW shareholder in bid to sack judicial manager
DAVID Whitehead Textiles Limited (DW) shareholder Edwin Chimanye has launched a High Court bid to push out the company’s judicial manager, Knowledge Hofisi, alleging gross misconduct in the administration of the fabrics firm.
In the High Court application — in which he cited Hofisi, DW and the Master of the High Court as respondents — Chimanye is seeking leave to cite DW in his main court proceedings against Hofisi. He told the court that DW was placed under provisional judicial management in December 2010 and has been run by a number of judicial managers before Hofisi took over in April 2014.
“The first respondent (Hofisi)’s tenure in office as the judicial manager of the second respondent (DW) has done more harm than good to both the creditors and shareholders of the second respondent in that: he has been committing gross misconduct in all his administration of the second respondent, he has failed to perform all of the duties imposed on him by the Companies Act, he has failed to comply with directives issued by the third respondent in terms of statute,” Chimanye said.
He said there was need for Hofisi to vacate office because the creditors and shareholders were on the verge of losing all their investments.
“I wish to apply for removal of the first respondent from his office as the judicial manager for the second respondent. I am advised that I cannot make that application without citing the second respondent which is currently under judicial management thus I seek leave of the court to do so,” he said.
Chimanye accused Hofisi of having created a debt of over US$5 million since the commencement of his tenure in office. “The first respondent has failed, neglected and/or refused to prepare and furnish the shareholders with detailed annual financial statements for the period commencing 2014 to date.
“The first respondent failed to account for the proceeds of the disposal of the DW non-productive assets that he sold in order to raise capital for DW. “He further failed to invest in such proceeds into the business of the company, notwithstanding his receipt of the said proceeds,” Chimanye said.
Among other things, Chimanye is complaining about Hofisi’s failure to call for statutory meetings as required by Section 306 of the Companies Act (Chapter 24:03, his decision to sell 51 percent equity stake of the company “arbitrarily, unreasonably and without having reflected on company financial statements and gross undervaluation of the business”.
He further accused Hofisi of misappropriating funds and causing delays in supplying clients with their orders. “In December 2015, the 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 not used towards procuring raw material to supply the order.
“This resulted in a three-year delay in the completion of supplying said client with the order,” he said.
He also said in 2017, the Zimbabwe Defence Forces made a pre-order for the supply of 60 000 metres of camouflage fabric and nothing was delivered, adding that in May 2018, the Zimbabwe Republic Police also paid US$368 000 for fabric which was also not supplied.