Bosasa execs 'didn't read' liquidation papers before signing

Embattled Bosasa is back in court seeking to overturn its application for liquidation. Courtesy #DStv403

PRETORIA - Bosasa, now known as African Global Operations, went to the high court on Wednesday to overturn an application for voluntary liquidation.

In its court papers, board chair, Johannes Gumede says the board didn't read legal papers supplied by consultants properly.

READ: Masutha to expand on Bosasa contracts

He says the board was in a rush to respond to banks' decision to close the company's accounts.

In court papers, Bosasa claims liquidators would cause immense harm to the company.

Advocate Mike Hellens appeared for African Global Holdings (Bosasa) and advocate Werner Luderitz appeared for Cloete Murray. 

Hellens argued that Bosasa actually isn't in liquidation because the board resolution to place it under liquidation was not valid.

He also argued that the master of the North Gauteng High Court in Pretoria couldn't appoint liquidators because the companies are in Johannesburg.

READ: SA banks ditch Bosasa

The administrating judge stated, "that does seem irregular but this is not an application to set aside the appointment of the liquidators, it's an application against the liquidation itself."

“Bosasa were ill-advised, acted under the wrong section, didn’t convene the board to take the special resolution. The consequences are that liquidators should never have been appointed.”

The company said there was no meeting of the companies, there was no notice and no compliance with the necessity to pass a special resolution.

Hellens said they want a declaratory order stating the special resolution to apply for voluntary liquidation is invalid. 

The urgency is to take away the powers of the liquidators based on the fact that they were appointed irregularly and are acting based on an invalid special resolution.

The judge has reserved judgement in the matter.

Source
eNCA