News / National
High Court to rule on Zifa dissolution
22 Jun 2016 at 07:01hrs | Views
THE High Court will today determine whether the insolvent Zifa should be placed under voluntary sequestration and allowed to hand over its problems to a trustee.
Zifa admitted that they were now insolvent and unable to manage the debts in excess of $6 million.
Through their lawyer Stephen Zvinavakobvu of Zvinavakobvu Law Chambers, the soccer controling body recently filed an application for sequestration and surrender, in which they nominated Freddie Chimbari of Fremus Executor Services as an appropriate trustee to manage their affairs.
The application was placed on today's provisional orders' roll at the High Court.
In an affidavit, forming the basis of the High Court application, Zifa president Philip Chiyangwa deposed an affidavit narrating the woes haunting the debt-ridden national football governing body.
"Applicant has been exposed to litigation on numerous occasions and in the process, has lost money, goodwill, reputation and any assets of value and is now left with a depleted asset register which virtually has nothing, such that its liabilities, debts and obligations now far outweigh its assets.
"Put differently, the applicant is insolvent and cannot function.
"It is unable to meet its debts and the only option open to it is to simply surrender in terms of the law so that its life comes to an end thus bringing to an end the continuation of debts to pile up and to avoid further exposing service providers, creditors and other entities that are owed," said Chiyangwa.
Chiyangwa said Zifa has been running a loss since dollarisation and even if all the remaining assets were to be sold, the debt can never be cleared.
"It is clear that even if the assets are to be sold, they cannot even meet an eighth of the liabilities. The situation cannot be turned around. It is just hopeless," Chiyangwa said.
Zifa's major creditors are: CBZ Bank – $1,795,000; Pandhari Lodge – $268,436; Vogel Weber – $21,000; Zifa Ad Hoc Committee – $600,000; Buymore Investments (owned by former Zifa boss Cuthbert Dube) – $438,222; Led Travel and Tours – $244,527.
Some other creditors include BancABC, Henrietta Rushwaya, Horst Webber, Tendai Hangazha, Sunday Chidzambwa, Norman Mapeza, African Sun, Rainbow Tourism, Eastown Commodities, Selous Hotel, Rahman Gumbo, Lazarus Mhurushoma, Negoma Transport, Shariff Musa, Cosafa, Viking Security, Joel Travel, Nelson Matongorere, City of Harare, TelOne, Traverse, Jackson Muguti, Danny Chiku, Jameson Hotel, Zimra, ZRP Mbare, Nicoz Diamond, Jongwe Printers, One Turn Mining, Zwane Tickets, Mali Football Association, Fifa, Kenny Marange, Zesa, Blossom Events, Frey Tag Projects, Irjana Luxliner, Sports and Recreation Commission, Betta Ball Sports, Logistica Shipping, Legacy, Palm Lodge, Cresta Oasis Hotel, New Ambassador Hotel, Caf, Trickmut Computers and Execu Sport.
However, the Master of High Court has strongly opposed the application and urged the High Court to dismiss it.
In a report by Additional Master of High Court (insolvency) Reuben Mukavhi, it was indicated that Zifa dissolved on June 4 this year and that it does not have any legal standing to sue or be sued separately from its membership.
"It becomes clear that Zifa does not have a legal personality separate from its members allowing it to sue or be sued in its own name.
"Also, it is very clear that Zifa is not a natural person or a partnership.
"The net effect of these facts on the present application is that Zifa has no legal capacity to bring this petition in its own name and for that reason the petition is a nullity," said Mukavhi.
The Additional Master accused Zifa of trying to defraud their creditors.
"I must report to the court that there appears to be some fraud against the creditors of Zifa by Zifa," he said.
"The court will see that the members of Zifa voted to dissolve Zifa under Article 77 of the Zifa Constitution.
"Though it is not mentioned anywhere in the application, it is interesting to note that a new outfit, going by the name National Football Association of Zimbabwe came into being at the same time that Zifa was dissolved.
"The new outfit is composed of the same members and office bearers as Zifa had.
"In fact, it would appear that all that was changed was the name of the association, the membership and the objects remaining the same," he said.
Mukavhi interpreted the changes as a way of deliberately avoiding paying debts to the serious prejudice of creditors.
"It then is inescapable conclusion that the said dissolution of Zifa and the simultaneous constitution of Nafaz were simply a method by the members of evading paying the creditors," he said.
Granting the application, Mukavhi said, the court would have helped the members of Zifa to duck their collective debts.
Zifa admitted that they were now insolvent and unable to manage the debts in excess of $6 million.
Through their lawyer Stephen Zvinavakobvu of Zvinavakobvu Law Chambers, the soccer controling body recently filed an application for sequestration and surrender, in which they nominated Freddie Chimbari of Fremus Executor Services as an appropriate trustee to manage their affairs.
The application was placed on today's provisional orders' roll at the High Court.
In an affidavit, forming the basis of the High Court application, Zifa president Philip Chiyangwa deposed an affidavit narrating the woes haunting the debt-ridden national football governing body.
"Applicant has been exposed to litigation on numerous occasions and in the process, has lost money, goodwill, reputation and any assets of value and is now left with a depleted asset register which virtually has nothing, such that its liabilities, debts and obligations now far outweigh its assets.
"Put differently, the applicant is insolvent and cannot function.
"It is unable to meet its debts and the only option open to it is to simply surrender in terms of the law so that its life comes to an end thus bringing to an end the continuation of debts to pile up and to avoid further exposing service providers, creditors and other entities that are owed," said Chiyangwa.
Chiyangwa said Zifa has been running a loss since dollarisation and even if all the remaining assets were to be sold, the debt can never be cleared.
"It is clear that even if the assets are to be sold, they cannot even meet an eighth of the liabilities. The situation cannot be turned around. It is just hopeless," Chiyangwa said.
Zifa's major creditors are: CBZ Bank – $1,795,000; Pandhari Lodge – $268,436; Vogel Weber – $21,000; Zifa Ad Hoc Committee – $600,000; Buymore Investments (owned by former Zifa boss Cuthbert Dube) – $438,222; Led Travel and Tours – $244,527.
Some other creditors include BancABC, Henrietta Rushwaya, Horst Webber, Tendai Hangazha, Sunday Chidzambwa, Norman Mapeza, African Sun, Rainbow Tourism, Eastown Commodities, Selous Hotel, Rahman Gumbo, Lazarus Mhurushoma, Negoma Transport, Shariff Musa, Cosafa, Viking Security, Joel Travel, Nelson Matongorere, City of Harare, TelOne, Traverse, Jackson Muguti, Danny Chiku, Jameson Hotel, Zimra, ZRP Mbare, Nicoz Diamond, Jongwe Printers, One Turn Mining, Zwane Tickets, Mali Football Association, Fifa, Kenny Marange, Zesa, Blossom Events, Frey Tag Projects, Irjana Luxliner, Sports and Recreation Commission, Betta Ball Sports, Logistica Shipping, Legacy, Palm Lodge, Cresta Oasis Hotel, New Ambassador Hotel, Caf, Trickmut Computers and Execu Sport.
However, the Master of High Court has strongly opposed the application and urged the High Court to dismiss it.
In a report by Additional Master of High Court (insolvency) Reuben Mukavhi, it was indicated that Zifa dissolved on June 4 this year and that it does not have any legal standing to sue or be sued separately from its membership.
"It becomes clear that Zifa does not have a legal personality separate from its members allowing it to sue or be sued in its own name.
"Also, it is very clear that Zifa is not a natural person or a partnership.
"The net effect of these facts on the present application is that Zifa has no legal capacity to bring this petition in its own name and for that reason the petition is a nullity," said Mukavhi.
The Additional Master accused Zifa of trying to defraud their creditors.
"I must report to the court that there appears to be some fraud against the creditors of Zifa by Zifa," he said.
"The court will see that the members of Zifa voted to dissolve Zifa under Article 77 of the Zifa Constitution.
"Though it is not mentioned anywhere in the application, it is interesting to note that a new outfit, going by the name National Football Association of Zimbabwe came into being at the same time that Zifa was dissolved.
"The new outfit is composed of the same members and office bearers as Zifa had.
"In fact, it would appear that all that was changed was the name of the association, the membership and the objects remaining the same," he said.
Mukavhi interpreted the changes as a way of deliberately avoiding paying debts to the serious prejudice of creditors.
"It then is inescapable conclusion that the said dissolution of Zifa and the simultaneous constitution of Nafaz were simply a method by the members of evading paying the creditors," he said.
Granting the application, Mukavhi said, the court would have helped the members of Zifa to duck their collective debts.
Source - chronicle
