Africa-Press – Lesotho. THREE was drama last Friday when Enrich Stores’ directors made frantic efforts to block the auction of the company’s gym equipment. As the auction was about to start, the directors were rushing to court but could not get a court order to stop the sale.
Instead, they resorted to pleading with the High Court and Court of Appeal registrar ’Mathato Sekoai who they approached with a letter showing that the Lesotho National Development Corporation (LNDC) was committed to bailing out the troubled company.
But by the time Sekoai called the sheriffs some equipment had already been auctioned. Three indoor cycling bikes were sold for M7 000 each and two sets of dumbbell racks with dumbbells were sold for M1 300 per set.
The company which collapsed a few weeks ago has been battling to fend off angry creditors, who include the landlord at its gym in Ha Tsolo. The company owes M600 000 in rent and its equipment have been attached to pay off the debt.
Other creditors include the landlord at its shop in the Maseru Central Business District, banks and wholesalers. The company has been telling creditors to hold their horses because it is negotiating a M15 million bailout package from the LNDC.
The LNDC says it has appointed a transaction adviser to assess Enrich’s viability. But while that assessment is going on creditors have not stopped pushing to recover what they are owed.
Friday’s auction was stopped midway but it appears to be just a temporary reprieve. What happens to the company and the few assets it still has depends on how quickly the LNDC completes its due diligence, reconstitutes the board and help it resume business.
Enrich’s chairman, Thato Damane, told thepost that he is disappointed by the auction on Friday. What pains Damane more is the prices for which the gym equipment was sold.
“The court order arrived while the auction was in progress, and everything had to stop,” Damane said, interpreting the registrar’s instruction to the sheriffs as the order of court.
“The cheapest dumbbell costs M700 each, but it was sold for M200,” he said. He said they owe the landlord over M600 000, which led to the landlord approaching the courts of law to recover his money.
“After they obtained a court order to auction our equipment, they were notified by the LNDC that it would bail us out therefore they should hold their horses a bit,” he said.
He also said they were dismayed by the landlord who insisted that he would set a deadline for them to pay or else the auction would go ahead. “They refused to listen and continued with the auction,” he said.
He thanked the courts for calling all the stakeholders including the LNDC and the landlord. “The LNDC made it clear that they were going to pay after their investigations and analysis,” he said.
He made it clear that they would fight for all the auctioned equipment to be returned. “We asked that the equipment should be returned inside because the buyers were still there, but we were not allowed,” he said.
He said he is not happy that the equipment was sold cheap, which meant that all of it would be sold to pay the landlord. Enrich shareholder, Molefi Ntšonyana, said they are not happy with the courts for issuing a court order to auction their equipment even before assessing prices and other factors.
“Now, half of our equipment has been sold, despite the LNDC’s promises to bail us out,” Ntšonyana said.
“This is a loss to us as a business, it is not fair,” he said. He said they would go back to their lawyers to find out if there is any legal means to get their auctioned equipment back.
Trade Minister Mokhethi Shelile told a press conference that the process to bail out Enrich was still going ahead. “We have finished doing our assessments, we have to sit down and sign the conditions and other things,” Shelile said.
He also said the company’s management will have to be reinforced with people who have expertise in running such a large-scale business. “We are only going to bail them out on their store, and not their gym or fitness centre,” he said.
He again said they want to rescue Enrich as it is owned by 6 000 Basotho. “It also sells Basotho products without discrimination, including vegetables,” he said.
LNDC Director, Molise Ramaili, said their job is to help grow businesses. He said the kind of business Enrich is involved in does not have many experts in the country.
“We have to capacitate them in that area,” Ramaili said.
He also said they have to change the configuration of the board and the management and capacitate them with experts. “That component was not there,” he said.
He also said what increased Enrich’s woes was that it did not negotiate prices with the wholesalers they used to stock from. “It made it hard for them to compete with other large shops,” he said.
Ramaili said every business has operational costs that need to be kept low. “Their costs were high and they were eroding their profits. ” He said the LNDC will ensure that Enrich has a turnaround structure.
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