MEIKLES stands to lose its shareholding in several of its subsidiaries after a High Court dismissed its application challenging the attachment of its shares by the sheriff over a $1,5 million debt owed to a local consultancy firm, Core Solutions.
The auction will go ahead today.
The company’s subsidiaries are involved in almost every sector of the economy, spanning from agriculture to retail of basic commodities, including hospitality.
A valuation done by Genius Advisory services puts the value of Meikles stores at $52,4 million, while Tanganda is valued at $41 million and the hospitality business stands at $16,6 million.
The listed conglomerate had contracted Core Solutions to help recover the money raided by the Reserve Bank of Zimbabwe (RBZ) from its accounts.
In an urgent application at the High Court before Justice Nevile Wamambo, Meikles argued that the intended sale in execution was unlawful and defective.
“The intended sale is also being done despite that the judgment upon which the sale is being premised has been challenged through an application for stay of execution pending the hearing of the main matter under HC10864/16, which is meant to determine the amount of money recovered by the applicant with the help of the first respondent from which figure the first respondent’s commission was supposed to be worked out.”
“The respondents ought to wait for the finalisation of the pending High Court applications before they execute. On the above basis the applicant seeks the stay of the said execution”.
“Should this application not be granted, the applicant stands to suffer irreparable harm in that its property will be sold at forced value to satisfy a debt which is still the subject of a challenge before this honourable court. Further, the first respondent will collect a commission or proceeds of the defective sale for money that was never received by the applicant, which essentially amounts to unjust enrichment.
Meikles argued that the arbitral award handed in favour of Wide Free Investments, which trades as Core Solutions, be stayed, pending finalisation of a court case between the conglomerate and the Finance ministry.
In the court papers seen by this paper, Meikles contends that it should not be compelled to pay Core Solutions because it was still in a fight with government to recover the money owed it.
The actual amount of debt is still being contested, with Meikles arguing it is owed $89,5 million, while government insists it is $53 million.
“The case between the Finance ministry and the applicant is the crux of this application. It ought to be understood that the outcome of that case has a huge bearing on this matter and, indeed, on the purported attachments and seizures of property pursued as a result of a judgment passed in this matter,” Meikles said in its papers.
“As it stands, the first respondent is seeking to enforce an order for collection commission on money that it never collected and was never paid to the applicant. The applicant is still fighting government for the remainder of its money, and the case is pending before this honourable court.”
To date, the RBZ has issued Treasury Bills with a cumulative face value of $78,6 million to Meikles, which the company argues were equivalent to $55 million cash, if one applies a discount rate of 30% as per the RBZ governor John Mangudya’s letter.
“It is also a settled position of law, stemming from the rules of this honourable court, that whenever the sheriff is instructed to attach movables of a judgement debtor, he is supposed to start with those of a lesser value, and immediately stop when the judgment claim is satisfied. The sheriff skipped the above procedure and went for the most valuable movables of the applicant, and wrongly and unprocedurally attached all of the shares, which far exceeds the value of the judgment claim,” the Meikles papers read.
“In light of the above, I pray that the writ of execution, upon which the sheriff acted, together with the notice of seizure and attachment in this case, be set aside with costs.”