About 1 600 jobs are on the line following the provisional winding up of stock exchange Alt-X-listed brick manufacturer Brikor yesterday which, it is alleged, owes more than R130 million to FirstRand Bank.
The company, the second-largest clay brick manufacturer in South Africa, which has its registered office in KwaZulu-Natal, put up a tough fight in the Durban High Court, but its request for an adjournment to allow other interested parties – including the National Union of Mineworkers (NUM) and Sars – to consider their positions, was rejected.
Judge Piet Koen said that the company had been under threat of liquidation since December and should have had all its facts at its fingertips by now.
The bank claims that the company is insolvent and unable to meet its debts, including an agreed monthly payment of R370 000 to discharge its overdraft.
But the company denies this, saying that it has made the payments and that its overdraft is reducing at the agreed rate.
And it is litigating against the bank in the Johannesburg High Court, alleging that it misallocated R30m it got from the sale in 2011 of its quarry in Mandini in Zululand by paying off one loan, which was not due, instead of another, which was.
This, the company says, “contrived a situation where it appeared to be unable to pay a debt which was due”.
Interdict
The company says that the bank, contrary to a repayment arrangement, then called up its overdrafts, cancelled its credit lines, attached its stock and took over the company’s cash flow through the cession of the book debts.
In December, the company obtained an interim interdict stopping the bank from launching liquidation proceedings, but this was discharged at the end of May and the bank lodged the winding-up application on July 12.
In an affidavit lodged at the 11th hour yesterday, the company’s chief executive and acting chairman, Garnett van Niekerk Parkin, said that the business had been going since the 1950s and had survived several economic downturns.
It employed 1 570 people and, with present “substantial growth”, should create a further 300 new jobs this financial year.
“The winding up will have disastrous consequences for hundreds of households,” he said.
Parkin said that at a meeting on Monday, NUM general secretary Frans Baleni had voiced “grave concerns” about the loss of jobs and said that the union might intervene in the court proceedings.
Parkin also accused the bank of misleading the court by withholding the company’s latest financial statements, which showed that its revenue had increased by 66 percent to R223m and its gross profit had increased by 64 percent to almost R68m with a profit, after tax, of R44m.
While the bank contends that it has been trying to engage constructively with the company over its alleged debts, the company says that the bank has been “high-handed” and “harsh”, with continuous threats of winding up.
Judge Koen granted the provisional winding up order, with an October 8 return date. - The Mercury