The business community in Bulawayo has condemned the judicial management mechanism, describing it as a “huge disaster” after it failed to resuscitate a number of ailing companies in the city.
BY MTHANDAZO NYONI
Presenting at the 2018 National Budget Statement review dialogue in Bulawayo on Tuesday, Association for Business in Zimbabwe chief executive officer, Victor Nyoni, said government should get rid of the judicial management system and find a new business rescue model.
“This is particularly important for the ailing businesses in the city. Judicial management mechanism has been a huge disaster. Merlin, GnD, National Blankets, Wet Blue, Belmont Leather, just but to mention a few are examples of how judicial management has failed us,” Nyoni said.
“A new business rescue model must be found as a matter of urgency. We are talking about the implementation of this budget and its leading to the success of the Bulawayo economy. We cannot continue with judicial management, with the results it is giving in the city.”
Nyoni said the concept of judicial management started in South Africa in the 1920s and South Africa has done away with the system.
“This happened in 2008. They now have a different rescue model and what is our government waiting for? You know all the workers that were at Merlin, GnD and all those companies I have mentioned, they are all over the streets of Bulawayo trying to make a living,” he said.
“So we are saying, something must be done and we are saying Bulawayo let’s talk about this judicial management animal. Are we happy with it, is it achieving the results that it should be achieving? Is this budget meaningful if we still continue using such models to revive our businesses?”
Judicial management seeks to rehabilitate financially troubled but viable companies, in a bid to avert liquidation or winding-up of the company.
Companies under judicial management enjoy a moratorium on debt payment, while the judicial manager works on revival initiatives, but obliged to pay creditors once the company returns to profitability and that often takes years, depending on the process of securing investors.
Turning to the budget, Nyoni said its success must be measured by how the government and businesses will work together to ensure there is all inclusive economic development in Zimbabwe.