CIV/APN/253/83

CIV/APN/254/83

IN THE
HIGH COURT OF LESOTHO

In the
Application of .

BURQUIP
(PTY) LIMITED Applicant

v

NORTHERN
LESOTHO STEEL AND DIESEL Respondent

ENGINEERING(PTY)
LIMITED

REASONS
FOR JUDGMENT

Filed by
the Hon. Chief Justice, Mr. Justice T.S. Cotran on the 25th day of
November, 1983

On Friday
11th November 1983 two separate urgent ex-parte applications were put
on my desk, one from the applicant Burquip(Edms)Bpk
seeking a
provisional order of winding up of the respondent company Northern
Lesotho Steel and Diesel Engineering(Pty)Ltd in terms
of s.173(f) and
(g) of the Companies Act 1967 and one application from the respondent
company seeking an order that it be placed
under judicial management
in terms of s. 265 et seq of the Act. There was no alternative but to
consolidate the applications and
treat the ex-parte application for
provisional winding up as if it was opposed. Mr. Moiloa. for the
respondent had in fact received,
a minute or two before he entered my
chambers, the papers in connection with the application for
provisional winding up. The Court
was told by Mr. Buys for the
applicant that he had apprised the respondent orally sometime before
that an application for provisional
winding up was imminent.

It was
conceded by Mr. Moiloa that the respondent company is unable to pay
its debts as its liabilities are in excess of its assets
but does not
agree that it is otherwise just and equitable that the company should
be wound up.

2

The major
secured creditor (in the sum of M280,000) is the Lesotho National
Development Corporation and one of the creditors is
the Standard
Bank(Ltd) Lesotho but an affidavit filed by a Mr. Nico Smith, who
claims to be a director of the respondent with a
Mr. Bender, each
holding 50 shares of the respondent company, explains the
difficulties that the company encountered, and attempts
to
demonstrate that there are good prospects of the company being
salvaged if placed under judicial management when within a few

months, it was hoped all the creditors would be paid. Mr. Buys
submits that Mr. Nico Smith has no authority to make an affidavit

because he is not a director of the company according to the records
of the Registrar of Companies who gives the names of S.S.
Weyers and
S.S. Meyers as directors and shareholders with 3000 and 1000 shares
respectively. On this last point there is certainly
a discrepancy
between the official records and what Mr. Nico avers on the names of
directors and the share capital. Even on the
assumption that Mr. Nico
can explain the discrepancy it seems to me that, on balance, a
provisional winding up order should be
given as prayed immediately.
Incidentally the figure of the assets given by Mr. Nico should in
fact be reduced by M80,000 because
this amount due to respondent
company has been ceded so that the company's liabilities are more
than appear on the papers. I will
fix the 5th December as the return
date. In the meantime the applicant for winding up and the respondent
who is seeking judicial
management will serve their respective papers
on the secured creditors (the LNDC) in case it has got something to
say. Leave is
also granted to the respondent to file further
affidavit. He may give information, if any, such as for example the
possibility
of getting injections of cash, or bank loans, that may,
on the return date, tilt the balance in favour of judicial
management.
The applicant is also given leave to reply.

Publication
of the provisional winding up order to be effected as prayed : once
in the Lesotho Weekly and once in the Government
gazette. Applicant
for judicial management; Mr. Moiloa