In an unusual move, the eThekwini Municipality intends to extend its contract with a liquidated company that has been operating the city’s parking meter system.
This is according to papers before the Durban High Court in an application for extended powers brought by liquidators Johannes Muller and Hussan Goga, who are handling the affairs of Emtateni Logistics.
Judge Gregory Kruger granted an order which extends the liquidators’ powers and enables them to continue the contract with the city.
A final liquidation order was granted against the company in October after Joburg-based EOH Security and Technologies brought an appli- cation claiming Emtateni was unable to pay its debts and owed it R26 million in rent.
The company had rented security equipment from EOH including pay-and-display machines and an information management system.
Emtateni’s sole source of income has been the parking meter contract, which it has held since 2007.
In an affidavit, Muller said the municipality had indicated in a letter, signed by eThekwini Transport Authority head Thami Manyathi, that it wanted to extend Emtateni’s contract until June next year.
Manyathi says in the letter, attached to the court papers, that the extension was necessary to “allow the municipality the opportunity to complete the procurement process to secure a new contract”.
The municipality recently told The Mercury that the new tender had been advertised but had not yet been awarded.
Muller said that the contract had to continue or there would be no dividends for the creditors.
He stressed the liquidators needed to take over the management and institute inquiry proceedings as irregularities needed to be investigated.
“The situation is untenable and should be investigated as a matter of extreme urgency.
“The directors’ conduct has been reckless and is harmful to the general body of creditors.”
It was also alleged the directors were involved in a “tangled web” of businesses that warranted investigation.
Some of the directors’ other businesses operated from the same address and there was a need to determine if the companies were linked.
He added that if the company was left to its own devices it would “pluck the meat from the bones” and there would be nothing left for creditors.
“It has been a downward slide for some time because of poor management, and the financial record-keeping has been lacking.”
He also said he had not been handed all the keys for the parking meters and if they were not emptied regularly and maintained they could be vandalised.
“There’s a valid concern that if the meters are out of order and full, it would be an invitation to pilfer.”
While the city said the company made about R4m a year, Muller said the meter contract yielded R500 000 to R1m a month and the company was owed R3.6m in parking fines and R5.4m for construction work.
Emtateni did not file papers in the liquidation application, but its lawyers, Severaj Incorporated, said in a letter attached to the court papers that the application was not opposed.
On Friday, the company’s attorney, Ajit Severaj, said the latest application had not been served on his clients and he could not comment.
“They cannot comment until they’ve seen the documents.” - The Mercury