Source: Liquidator under fire over missing US$70K | Herald (Crime)
Fidelis Munyoro Chief Court Reporter
A HARARE liquidator has been given a 14-day ultimatum by the Master of the High Court to account for US$70 000 cash he received from the sale of the farm belonging to a company under liquidation.
Cecil Madondo (60), the managing director of Tudor House Consultants (Pvt) Ltd, has so far been unable to account to two shareholders of Kunganda Farm (Private) Limited for the money he received in 2019.
Madondo was appointed liquidator of Kunganda Farm (Private) Limited and that meant he had to sell the farm, among any other assets. He received US$70 000 as part of the US$180 000 purchase price of the farm. Shareholders Ms Judith Senior Maswela and Ms Mwami Siamsipa challenged Mr Madondo to account for the money, but the Master of the High Court initially sided with the liquidator and threw out the complaints.
The liquidator used the excuse that the sale should be recorded in local currency. This prompted Ms Maswela and Ms Siamsipa, through lawyers Mawere, Sibanda Legal Practitioners, to approach the High Court seeking to set aside the decision of the Master of the High Court backing the liquidator.
In its ruling the High Court upheld the shareholders’ objection to the second interim liquidation and distribution account and ordered the Master of the High Court to do a fresh inquiry. Following the court ruling, the Master of the High Court carried out fresh investigations and found no fresh evidence supporting the liquidator on how he dealt with the money.
The Master has since written to Mr Madondo asking him to amend the account in question to reflect and make provisions for the US$70 000 that was paid in the interests of all stakeholders, including shareholders.
“Accordingly, we direct that the liquidator makes such amendments to the account as clearly and properly make provision for the US$70 000 cash and lodge it with the Master within 14 days of receipt of this determination,” read the letter dated October 14 2022 signed by V Gapara, additional master for insolvency and minors.
Mr Madondo had not given credible evidence of the movement of the US$70 000 from the time that it was received in June 2019 to the time of the lodging of the account in October 2019. Madondo sold the farm, the sole property of the Kunganda, for US$180 000.
He was paid US$70 000 and the remainder was to be paid monthly installments of US$10 000. Some five days later on June 24 2019, Statutory Instrument 142 was promulgated, whose effect was that all transactions should be entered in local currency so Mr Madondo said that the use of the United States dollar in local transactions was prohibited by that legal instrument.
When he prepared his second interim liquidation and distribution account, it did not show the US$70 000 and Ms Maswela and Ms Siamsipa queried that. Mr Madondo’s explanation was that when he received the money he deposited it into a local account at the interbank rate.
But the owners of the money argued that it should have been deposited into a nostro foreign currency account to preserve the value. The Master of the High Court dismissed that argument. However, the High Court upheld their argument and reversed the Master’s decision and ordered a fresh inquiry.