60pc Byo firms under judicial management Minister Nhema
Minister Nhema

Minister Nhema

Business Editor
THE government faces a dilemma in enforcing indigenisation compliance on Bulawayo companies as close to 60 percent of the city’s firms are under judicial management. Youth Development Indigenisation and Empowerment Minister Cde Francis Nhema revealed this on Sunday saying the closure of close to 100 city firms in the last decade and the placing of surviving ones under judicial management should be urgently addressed to unlock opportunities for indigenous entrepreneurs.

“60 percent of Bulawayo businesses are under judicial management. We allowed it and it’s now difficult legally to untangle ourselves,” he told delegates during the Zanu-PF Matabeleland regional Zim-Asset conference at Elangeni Training Centre in Bulawayo.

“We need to find ways to untangle ourselves. People know it will take time before these cases are finalised before the law. It’s difficult now to enforce compliance because of this but that should not stop us.”

Owing to the biting economic hardships, a number of ailing firms sought judicial management certificates from the courts to survive liquidation.
Companies under judicial management enjoy a moratorium on debt payment while the judicial manager works on revival initiatives, but are obliged to pay creditors once the company returns to profitability and that often takes years depending on the process of securing investors.

Those under liquidation can only pay creditors once assets of the company have been sold and priority is given to secured creditors and government institutions.
There is growing concern the process is now being abused by troubled company owners who use the judicial process to evade nagging creditors to delay payment.

Commenting on the matter, Deputy Industry and Commerce Minister Cde Chiratidzo Mabuwa said the demise of city firms was a reflection of skewed ownership of means of production in favour of foreigners.

She urged locals to grab opportunities offered by the indigenisation programme to participate in the mainstream economy.
“Let’s have the urge to stand up and make things happen”.

Mabuwa said six firms had joined the judicial management league since January and bemoaned the recent closure of big companies such as Savanna Woods, Trade Power and Willsgrove due to operational challenges.

She said judicial management was a “monster” to businesses – equating it to failure to run a family and asking someone to take over.
Mabuwa said most foreign owned firms prefer closing shop than complying with empowerment procedures.

She implored local entrepreneurs to unite, identify opportunities in closed businesses and seek government support in resuscitating them.
Cde Nhema said the government would not budge on the 51/49 percent share ownership ratio on natural resource exploiting firms, saying this was meant to protect business interests of the country’s 13 million population.

“To say that is too much is not fair. That’s the minimum for indigenous people. In other countries you can hardly get 30 percent if you’re a foreigner,” he added.
The minister said companies in the non-resource sectors should approach his ministry and table their compliance plans, ensuring that workers get their 10 percent shares as stipulated by law.

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