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Bosses block Whitex sale
By
Pilirani Semu-Banda - 02-06-2003 |
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David Whitehead and Sons (DWS) Chief Executive Evelyn Mwapasa and the company’s Weaving Manager Thomas Fungulani on Thursday obtained a court injunction stopping the Privatisation Commission (PC) from selling the textile company to Mapeto Wholesalers.
The injunction granted by High Court judge Healey Potani indicated that the PC and Mapeto Wholesalers will be held in contempt of court and be liable to imprisonment if they disobey the court order.
Court records indicated that Mwapasa and Fungulani have challenged the privatisation of DWS on their own behalf and on behalf of other employees of the company saying K73 million for which Mapeto Wholesalers is buying the textile company is “too low for real”.
Minutes of a DWS management meeting held on Wednesday, which have also been tendered to the court, showed that the “fair value of the company would be around K300 million”.
The minutes showed that DWS is no longer making losses contrary to the valuation of the assets by the PC which described some of the company’s assets as scrap and not worth much.
The minutes also said the latest management accounts of March 2003 show that DWS recorded a profit of K7.456 million in the month.
“Since October, 2002, the company has been able to pay off old creditors and other expenses not relating to the current operation to the tune of K16 million,” stated the minutes.
They also stated that besides this, DWS has cash bank balances of around K14 million and that this demonstrates that the assets of the company can be profitably operated without any improvements and that the assets of the company have proven ability to generate healthy cash flows.
“A point to be stressed is that the cash flow achievements outlined have been realised in spite of the fact that the company was never provided with seed cash working capital for the small operation, which started in October, 2002,” said the minutes.
According to the same minutes, the management team, comprising 11 people therefore agreed to seek court intervention in the matter saying they have acted so because they are a group of citizens in a privileged position who possess vital information.
“Therefore we are compelled by public duty to move,” said the minutes.
PC announced on Monday DWS had been sold to the consortium of Mapeto Wholesalers and Jimtex Private Limited.
Mapeto Wholesalers is owned by Faizal Latif who is an importer and distributor of textiles in Malawi while Jimtex of India has textile operations in Tanzania and India.
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