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MKM boss vows to stop auction 

 

‘Even if it means burning down Lesotho Sun Hotel’ where the sale is scheduled to take place tomorrow’

Lekhetho Ntsukunyane

MKM Director, Simon Thebe-ea-Khale, has vowed to stop tomorrow’s public auction of his commercial buildings “even if it means burning down Lesotho Sun Hotel” where the sale is scheduled to take place tomorrow beginning 10:30 am.

The Commercial Court had on Friday granted an interim order blocking the auction of Mr Thebe-ea-Khale’s six commercial properties located in Maseru, only to cancel the order two hours later after a counter-application by South Africa-based liquidators, Chavonnes Cooper and Daan Roberts.

However, Mr Thebe-ea-Khale, who professed ignorance of the cancellation of the interim court order when the Sunday Express sought his comment late yesterday, said he would fight to save his empire even if meant “dying or burning down Lesotho Sun” in the process.

Mr Thebe-ea-Khale yesterday insisted the auction was not warranted, adding he would find means to repay investors, estimated at 400 000, who were left stranded when the Central Bank of Lesotho (CBL) closed down his business seven years ago.

MKM was shut down in November 2007 by the CBL after it emerged the firm was operating banking and insurance businesses in violation of the Financial Institution Act 1999 and Insurance Act 1976.

A CBL-commissioned investigation conducted by South African firm, PricewaterhouseCoopers, also revealed of the M400 million invested by depositors, the Group— comprising MKM Marketing Ltd, Star Lion Group Ltd, Star Lion Insurance Ltd and Star Lion Gold Coin Investment (Pty) Ltd—could only account for M100 million in assets that included buildings and vehicles.

The Central Bank then applied for MKM’s liquidation in the High Court, citing the company was insolvent because its liabilities were much more than its assets. The application was granted on 18 May 2011, and upheld on 21 October 2011 by the Court of Appeal.

After losing the Court of Appeal challenge, MKM’s disposal was now only a matter of time and a public notice released by the liquidators early this month revealed the auction of the properties –Agric Bank Building along Kingsway, MKM Headquarters and three other buildings in the Railway Station Industrial Area, and a massive office complex between Sparrows and Engen Garage, all in Maseru—would take place on 17 November 2014.

However, in a new twist to the protracted saga, MKM lawyers Advocate Makhetha Motšoari and Advocate Ranale Thoahlane on Friday filed an urgent application before the Commercial Court, seeking to stop the auction.

The application was granted by Justice Semapo Peete “returnable on the 24th of November 2014, and asking the Respondents(Chavonnes Cooper, Daan Roberts, Master of the High Court and Attorney General) “to show cause, if any, why the sale of MKM in an auction on the 17th of November 2014 shall not be stayed pending the final determination of the application; calling of a creditors’ meeting for the purposes of proving their claims, and calling of a contributors’ meeting for purposes envisaged in Section 186 (1) (b) of the Companies Act 25 of 1967 prior to any sale of the properties of the companies in liquidation.”

However, no sooner had Justice Peete issued the interim order than the liquidators, represented by Webber Newdigate’s Advocate Edeling, approached the same judge with a counter-application.

Justice Peete then set aside the interim order, noting in his ruling: “Having heard Mr Edeling when he submitted that the order granted by this court at 14:45pm on 14 November 2014 be set aside and rescinded upon following grounds:

“No proper 24-hour notice was made in accordance with Practice Directive No.1 of 2011 (by former Chief Justice Mahapela Lehohla dated 4 November 2011. This directive was circulated widely through Lesotho LII (Legal Information Institute) website to all practitioners.

“That his attorneys, Webber Newdigate, on 13 November 2014 brought to the attention of the registrars this Practice Directive. Erroneously, this letter was not timeously circulated to judges – especially the judge on call. The urgent application should have been brought before the Commercial Court unless the Chief Justice had designated another High Court judge. None of the above was complied with and the court order was granted erroneously and in the absence of the respondents (liquidators).

“In terms of Rule 45 (1) (a) of the High Court Rules of 1980, the order granted by this court at 14:45pm on 14 November 2014 is set aside and rescinded. The court agrees with Mr Edeling’s submissions. Mr Edeling undertakes that the auction will proceed as arranged and advertised and the respondents undertake not to confirm any offer received at the auction for a period of 14 days from 17 November 2014 in order to afford the applicants an opportunity to seek relief of interdict in the Commercial Court after having given the 24-hour notice to the respondents.”

 

 

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