Bosasa goes bust as court rules business is commercially insolvent

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Corruption accused company African Global Operations, formerly Bosasa, is commercially insolvent and should remain in the hands of its liquidators, says the Supreme Court of Appeal (SCA).

The company successfully resorted to the Gauteng high court where acting judge Goolam Ameer agreed that its resolutions to voluntarily wind up the company were null and void as the company was notinsolvent at the time of the decision. He ordered the liquidators to restore control of the company to the directors.

In doing so, Wallis said, Ameer had ignored a damning report dealing with the company’s financial position which had included the audited annual financial statements for the year ending February 2017 signed by then directors Joe Gumede and Gavin Watson. It indicated the company incurred a net loss of more than R40m and its total liabilities exceeded its total assets by more than R173m.

“Had the judge had any regard to that document it is difficult to see on what basis he could have accepted at face value Mr Gumede’s statement that the companies were all solvent,” said Wallis. Wallis was just as scathing about judge Ameer’s decision to grant a cost order against the liquidators in their personal capacities. He said there had never been any complaint that Murray was acting improperly or outside the scope of his powers as liquidator, or that he and the other liquidators were acting against the interest of the companies, their shareholders or creditors. There was no grounds whatsoever justifying the punitive cost order.

“The grounds relied on by the judge were based on speculation and insinuations that verged on the defamatory.”

 

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