A company linked to controversial businessman James Makamba has been put under judicial management.
Kestrel Corporation's indebtedness marks another dip in the fortunes of the embattled businessman, who returned to Zimbabwe in December 2017 after former president Robert Mugabe's removal.
Makamba had spent more than a decade in self-imposed exile in SA and the UK, and soon after his return he made a failed attempt to represent Zanu-PF in the Mount Darwin constituency.
Four months ago, his boutique hotel in Johannesburg was put up for auction by Absa bank over a debt of nearly R60m. The debt was accrued in credit cards, mortgage debt and vehicle finance. Villa Royale, in Sandhurst, was auctioned for R36.5m.
Makamba has also been locked in a boardroom battle at Telecel Zimbabwe, the smallest of the country's three mobile operators. He has been fighting off claims that he stepped down as chair last year and made way for Gerald Mlotshwa. It is understood Makamba is due for an $11m payout if he walks away.
Mlotshwa, a Harare lawyer, is the son-in-law of President Emmerson Mnangagwa. He refused to comment on the fight for the Telecel chair with Makamba, but company sources confirmed there was no let-up in the tussle.
One insider said: "Makamba continues to claim he is chairman of Telecel Zimbabwe [but] the last time he tried calling for a board meeting it was ignored."
A former business associate of Makamba, George Manyere, successfully petitioned the high court in Bulawayo last week for an order of provisional judicial management against Kestrel Corporation, of which Makamba is the director.
Judicial management refers to a method of debt restructuring whereby an independent manager is appointed to run a company in financial distress.
Manyere and Makamba have been wrangling for more than two years over a $2.75m loan Manyere extended to Kestrel to help it acquire the major shareholding in Telecel Zimbabwe.
In court papers, Manyere said he wanted the company placed under judicial management because of "mismanagement, recklessness and fraud".
His affidavit said: "The respondent is unable to pay its debts, or is probably unable to pay its debts and has not become or is prevented from becoming a successful concern.
"There is a reasonable probability that if the company is placed under judicial management it will be enabled to pay its debts, or meet its obligations and become a successful concern."
Manyere said he gave Kestrel $2.75m as the deposit for the purchase of 690,000 shares in Empowerment Corporation, the 40% shareholder in Telecel. "Consequent to the acceptance of the deposit consideration, the parties signed two agreements of sale for the purchase of 69% of [Kestrel Corporation's] shares in Empowerment Corporation," said Manyere.
"Notwithstanding the execution of the agreements, James Makamba continues to avoid completion of the sale of the shares and/or refund of the deposit. He has brought forward various proposals to the applicants to try and have [Kestrel] resile from the agreements signed or reach settlement terms for refund of the deposit. None of the initiatives has been concluded."
The judge said any challenge to the order must be made before the high court in Bulawayo by May 23. In the meantime, Kestrel was placed "under judicial management for an indefinite period".
Winsley Militala, an insolvency practitioner at Petwin Executor and Trust Company in Harare, was appointed judicial manager. He was empowered by the court to raise money on the security of Kestrel's assets, without seeking consent from the directors.
"The directors of Kestrel Corporation and any other person vested with the management of the company are divested of such management," said the court order.
On Friday, Militala confirmed his appointment but said he was "also in the darkness" about Kestrel's indebtedness.
"What we have so far done has been to start with the deeds office, so we identify the persons linked to the company.
"We have approached them and asked that they surrender the books of the company to us," he said.
Militala confirmed Kestrel's indirect interest in Telecel.
"I am unaware of any investments yet as I have just assumed office," he said.
"A detailed report will be made available at a stakeholders meeting to be convened soon."..