Bosasa changes its mind about liquidation, heads to court

Hugely controversial facilities management company African Global Operations – better known by its previous name Bosasa – is at the High Court in Johannesburg on Tuesday morning where it is seeking to reverse the liquidation process it embarked on voluntarily.

[JUST-IN] Facilities Management company #BOSASA is at the Johannesburg High Court this morning in a bid to reverse its voluntary liquidation bid which was resolved by the company’s board last month.

— #LordOfTheMedia (@samkelemaseko) March 12, 2019

The Citizen reported in February that some of South Africa’s major financial institutions had formally notified African Global Operations that they would be terminating the hugely controversial facilities management company’s accounts, according to a statement from the company.

The banks reportedly cited reputational risk as their reason for cutting ties.

Bosasa’s statement at the time confirmed that they would be applying for voluntary liquidation after banks had sent them formal notification of the closure of their accounts.

But according to The Sowetan, the company has since submitted an affidavit as part of an application to reverse their voluntary liquidation.

The urgent application was filed at the High Court in Johannesburg last week and the matter is being heard today.

READ MORE: Bosasa dropped by banks, forced to apply for liquidation

The affidavit reportedly argued that the decision to liquidate was taken as a result of bad advice received from a consultant and that the company’s liquidation did not follow proper processes.

The company is believed to want the court to dismiss the liquidators who have been appointed to facilitate the process and hand control of the company and its assets back to its directors as they were before the liquidation process began.

Explaining their initial decision to liquidate, the company claimed their treatment by banks was “occasioned by negative media reports” which caused them “extensive reputational damage”. 

The statement further states that their decision to liquidate has nothing to do with the group’s “liquidity status, financial stability, operational performance or growth forecasts. On the contrary, the group is both factually and commercially solvent”.

(Compiled by Daniel Friedman. Additional reporting by ANA)

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