Merlin court case crumbles

Oliver Kazunga, Senior Business Reporter
THE Supreme Court has abandoned an appeal by Merlin Limited judicial manager, Mr Cecil Madondo, against a High Court ruling after he failed to follow it up within the specified timeframe.

On the 8th of November 2018 under case number 2724/18, Justice Martin Makonese, sitting in the High Court in Bulawayo, ruled that the judgment of the court in HC 2353/11, which placed Merlin (Private) Limited under judicial management, did not in any way affect the status of Merspin Limited.

Consequently, Merlin Limited was declared as a fictitious and non-existent company.

Following the High Court judgment on the matter, Mr Madondo through his lawyers, Mabuye Zvarevashe-Evan, on November 14, 2018, filed a notice of appeal to the Supreme Court against the judgment.

According to the Supreme Court papers, after filing the appeal, Mr Madondo was supposed to have complied with Rule 1 (11) for the inspection of the record within the time specified in terms of the Supreme Court rules, 2018.

“Reference is made to the Notice of Appeal you filed on November 14, 2018. It is noted that you did not comply with Rule 17 (11) for the inspection of the record within the time specified in terms of the Supreme Court rules, 2018,” reads part of the Supreme Court document, dated 30 January 2019.

“In terms of Rule 17 (12) of the aforementioned rules, the appeal is deemed as to have been abandoned.”

In an interview, executive director for Maydeep Investments (shareholders for Merspin and Merlin Limited), Mr Danisa Nkomo said: “From our last application at the High Court, where we successfully asked the court to declare that the order that (Mr) Madondo is holding has nothing to do with Merspin, Madondo proceeded to appeal against that order at the Supreme Court and he didn’t follow up the appeal. And the Supreme Court has actually communicated that the appeal was abandoned because he did not follow it up.”

Mr Nkomo said their concern as shareholders was Mr Madondo’s continued interference with the Merspin and Merlin business purporting to be the judicial manager of the two entities.

This, he said, was detrimental to the investment that the shareholders of the two companies were trying to bring in.

“And also what is of concern is that, he continues to abuse the court process, each time he files papers, we challenge them, he abandons action and starts another action again.

“And in the meantime, as long as those actions are pending before the courts, the investors and others stakeholders are hamstrung in terms of giving the company the assistance or engaging in meaningful discussions to conclude and get the investment into the company,” said Mr Nkomo.

“Of late, we received information to the fact that he has circulated a report to stakeholders and even to our local financiers to the effect that he has got investors and he wants to have those funds released to him.

“We also received an e-mail from him where he said he has got investors for the company. We are saying whoever is talking to Madondo about investment in Merspin and Merlin Limited is just wasting his time because they have to be talking to the owners of the company,” said Mr Nkomo.

He said anyone entering into contracts with Madondo on matters relating to Merspin and Merlin risk losing their investments

“We would also want to advise the general public that Merspin Limited and Merlin Limited are not under judicial management so to that effect if there is any creditor or investor who wants to participate in the investment in Merspin we will welcome the investment. However, the investors should be talking to us not to Madondo.”

An electronic copy of a “Progress update report-January 2019” on Merlin Limited, which Mr Madondo sent to this paper recently, indicates that they had filed an application in December 2018 under case number HC 11434/18 for stay of execution.

“On the 17th of December 2018, the High Court issued a consent order between the judicial manager and Old Mutual, which requires that the parties resolve the matters before the 28th of February 2019, failure of which assets could be sold in execution,” reads part of the progress update report.

Commenting on the matter, Mr Nkomo said they have engaged their lawyers to approach the High Court and challenge the consent order while at the same time, the shareholders were also engaging Old Mutual that it would not be in the creditors’ interest to have the textile company’s assets liquidated as they will not get anything close to what the shareholders will pay them in terms of outstanding rental fees.

He said if the assets are liquidated it would also impact negatively on the resuscitation of the company.

“So we have got a common understanding with Old Mutual where we are saying ‘let’s work towards the resuscitation of the company’. Old Mutual are interested in seeing the property housing Merspin and Merlin performing and getting returns,” said Mr Nkomo.

Mr Madondo could not be reached for comment by the time of going to print yesterday as his mobile phone was not being answered.

— @okazunga

You Might Also Like