CAPS United officials have said they are confident they will avoid liquidation and allayed fears they are on verge of collapsing after slipping into a financial quagmire that has raised fears that the Green Machine could disintegrate.The club’s future was called into question after two former directors issued a three-week notice to approach the High Court seeking liquidation over failure to pay off debts running into millions of dollars.
Lewis Uriri and Nhamo Tutisani, two former board members of the Green Machine, served CAPS United with the notice, arguing that the club had failed to clear debts and didn’t have the capacity to do so.
The two injected funds into the club during their tenure as directors and the club owes them a combined $143 000.
Farai Jere, a shareholder who returned to the club’s board last year as a non-executive director, tops the list of creditors as he is owed close to $2 million.
CAPS United have acknowledged owing Jere $1,4 million and the club have confirmed they owe Uriri $25 695 and Tutisani $118 000.
In a letter dated April 7 2015, which was served on CAPS United on Tuesday, lawyers representing Uriri and Tutisani, Wilmot and Bennett, said the club was now insolvent and that provisional liquidation was the best option under the circumstances.
“Our clients consider that Caps United Football Club P/L is insolvent in that it is unable to pay its debts,” the lawyers said in their letter.
“We demand with the provisions of Section 205 (a) of the Companies Act in mind, the payment of the above said sums ($143 000 for the duo) within three weeks of the receipt of this letter, failing which our clients shall forthwith petition the High Court for the liquidation of CAPS United Football Club with a view that its sole asset, CAPS United Football Club (including the PSL franchise) be sold to satisfy the debts.”
Yesterday, CAPS United responded through a statement by club chief executive, Joe Makuvire, in which they allayed fears that the Premiership giants were on the verge of collapsing.
Makuvire acknowledged that they owed Uriri and Tutisani and said measures would be put in place to ensure that the debts to their former board members were serviced.
“The Club owners (Twine Phiri and Jere) met today in Harare and the following was resolved:
a) There is no shareholder dispute at CAPS and none of the shareholders have any pending litigation against the Club.
b) The Club acknowledges owing various amounts of money to some of its previous board members and shall engage the aggrieved parties with a view of negotiating a payment plan.
c) The Club is confident of its ability to working a permanent solution to this issue.
d) The Board encourages all club supporters to remain calm and committed to the Club. The Board shall continue to seek a sustainable funding model for the Club.”
According to Section 205 (a) of the Companies Act, “A company shall be deemed to be unable to pay its debts-
a) If a creditor, by cession or otherwise, to whom the company is indebted in a sum exceeding one hundred United States dollars then due, has served on the company a demand requiring it to pay the sum so due by leaving the demand at its registered office and if the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor . . . “
The lawyers representing Uriri and Tutisani indicated that they had identified a qualified provisional liquidator who was prepared to handle the affairs of the company.
“We advise, for the avoidance of doubt, that Mr Bhudhama Chikamhi has agreed to act as provisional liquidator in the event that the company is placed under provisional liquidation,” reads the letter.
In the event that the sale of CAPS United and its franchise do not fully satisfy the debt, the lawyers said all directors and officers of the club shall be liable.
“In the event that the sale of the company’s assets does not meet the debts owed, we advise that every director and officer of the company shall be a contributory in terms of the law,” the lawyers said.
On June 30 2014, Phiri and the then club secretary Uriri, on behalf of CAPS United, acknowledged that the club owed Jere $1,4 million.