The winners of the Pula Steel sale tender DH Machine Manufacturing will have to go back to the drawing board, now at the full mercy of creditors, after it emerged that it made a shortfall when paying the required payment of 10 percent deposit offer amount plus VAT and commission for the plant.
However, a hurried letter from Pula Steel liquidator John Hinchliffe to creditors this week seen by BusinessPost shows the liquidator admitting of an error which resulted from an “honest communication. One of the requirement of the tender was that the offeror (buyer) submit proof of payment of a 10 percent deposit on the offer amount plus VAT and commission into the bank of Pula Steel. According to tender documents, the proof of payment was required to be submitted simultaneously with the offer.
According to a letter from Hinchliffe who agreed with the auctioneer from South African WH Auctioneers to sell Pula Steel to DH for P26 million recently as the Vermas with their company Wealth Key Trading offered a lesser bid of P17 million. Wealth Key did not submit proof of payment of the 10 percent deposit as it was required while DH did submit proof of payment. Hinchliffe also admitted in his letter that he was asked at the 4 August 2019 creditors meeting whether DH paid the full amount of the deposit and responded the company made the payment.
However it emerged that what Hinchliffe said was not true as the money was short of over P400 000 causing the sale to fail and go back to the drawing board with immediate effect. “…it came to my attention that the deposit that was paid amounted to 10 percent of the capital sum. It did not include the additional 10 percent payable on the Vat and commission. The deposit received amounted to P2 140 121. There was the shortfall of P469 479 which was the 10 percent payable on the Vat and commission and a small exchange rate variation.
Hinchliffe told creditors in a letter leaked to BusinessPost that the error in payment occurred according to an “honest miscommunication.” The Pula Steel creditors explained that this error happen between him, WH Auctioneers which was facilitating the sale of the plant and DH which is the winner of the bid. Hinchliffe also DH made an 11 hour payment for the shortfall. The liquidator produced the bank statement reflecting the initial amount received from DH as well as the notification of payment of the shortfall both attached to the letter as proof.
According to observation, it further emerged that Pula Steel liquidator Hinchliffe and WH Auctioneers sat on a payment error for a period more than a month as payment for the shortfall was paid after five weeks. According to the bank statements seen by this publication, DH paid P2 140 120.71 to WH Auctioneers on 4 July 2019. This is the amount which had a shortfall. Last week Friday DH further made a payment of P469 479.26 to the Pula Steel account at First Rand bank account, according to bank statements seen by this publication.
In an interview with BusinessPost, Hinchliffe contradicted what this publication saw on the bank statements and said original payments were done on 24 July, not on 4 July until additional payment was done last week Friday, and the error was discovered after comments received from the unsuccessful offeror, Wealth Key. He said after DH rival launched a complaint they double checked the calculations and the wording of the offer requirements document and detected the error.
When asked if it would be fair for him to be asked of negligence for committing such an error, the Pula Steel liquidator reiterated what he wrote on his letter to creditors saying the error occurred due to an “honest mistake.” According to Hinchliffe, nothing will change on the sale of Pula Steel as creditors still stand by their vote for DH and reject the Vermas who still desperately covet the plant. “I must also point out that the majority of the creditors have opted to stand by their votes as passed at the meeting despite the error,” Hinchliffe told BusinessPost.
No cost or any delay will be felt in the process as all the creditors who voted in favor of DH to take over Pula Steel have confirmed that the recent error will not affect their voting, according to Hinchliffe. However the Pula Steel liquidator said there could be a possibility of significant cost and delays as a result of an urgent application from the Verma seeking to set aside the resolutions passed by the majority of the creditors and to stop the sale of assets.
Representing Wealth Key, Deepak Verma confirmed that he has lodged an urgent application with the high court to set aside the sale as it has flaws. He corrected that this was a private treaty not a tender and all conditions of the treaty were not met. Verma told this publication that he gave the liquidator a cash bank guarantee for full amount but was still rejected and DH got the nod. He accuses the Pula Steel liquidator of favoring DH and trying to bend the rules for the company by hook or crook.
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.
The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.
In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.
Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.
China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.
Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.
On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.
According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.