Tuesday, January 19, 2021

CMB challenges its liquidation

Capital Management Botswana (CMB) directors Tim Marsland and Rapula Okaile want the High Court to rescind a decision by Justice Mercy Garakwe placing the company under final liquidation.

Justice Garekwe confirmed last week the final liquidation of CMB and John Little of Corporate Service as its liquidator.

In his founding affidavit, Okaile states that the basis for the winding up order is basically that CMB  is insolvent and it is unable to pay its debts and that its liabilities exceeds its assets and that there are no prospects that it will be restored to solvency within a reasonable period.

“I dispute and deny that the 2nd Respondent (CMB) is insolvent. I would aver that the Respondent owns a block of flats whose market value is P14 million as shown by the evaluation report,” said Okaile.

He said as shareholders of CMB they have cash to pay rental arrears that they allegedly “owe, in any case to the best of my recollection when I ran office, there were no rental arrears.”

Okaile said if there are any those would be the responsibility of the statutory manager. “There has not been any demand to capitalise the 2nd Respondent by the former statutory manager,” said Okaile.

He denied that Capital Management Botswana is indebted to National Amalgamated Local Central Government and Parastatal Union.

Whilst it is accepted that CMB had plans and intentions of moving to the building belonging to the Union they however,  never moved to occupy the said buildings and therefore do not owe.

“The Respondent is not indebted to Grant Thornton as alleged, it denies and disputes any liability whatsoever to the said audit company which is in violation of its professional duties and obligations withheld crucial information from Tax authorities which was intended for Respondent,” said Okaile.

He said CMB does not owe Lobatse Clay Works (Pty) Ltd and Yarona Media Holdings (Pty) Ltd P60 million and P17 million respectively.

“ The monies alleged as debt are monies which the Botswana Opportunities comprising of the respondent and Botswana Public Officers Pension Fund were to invest in the said companies.

These are not debts as in like the Respondent or Botswana Opportunities Partnership had borrowed monies from the said companies,” said Okaile.

He added that “These are investments which the BOP and not the Respondent were to make in the said companies. The investments would not be made as the partners in the Botswana Opportunities Partnership fell out.”

The claim that CMB may face damages suit from Bona Life cannot be a basis for claiming that an entity is insolvent.

He said that even though Non Bank Financial Institution Capital management (NBFIRA) had withdrawn CMB’s license and even closed down, that cannot be the reason for liquidation “the Respondent still wants to do some business not necessarily related to the one it was doing.” 

Marsland also deposed to an affidavit supporting Okaile’s arguments.

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