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UBM shuts down after 50 years

by Staff reporter
15 August 2018 | 3906 Views
United Builders Merchants (UBM) has shut down after operating in Zimbabwe for the past 50 years.

According to employees who spoke to the Daily News on condition of anonymity, UBM management announced last week that the company was filing for liquidation.

Last month, the company's managing director, Michael Bones, read out an e-mail from UBM's major shareholder, Andre Prinsloo, who is domiciled in South Africa, informing employees that the business was no longer viable.

It was revealed to the workers that a board resolution had been reached to the effect that they no longer have any other option than to close and file for bankruptcy and liquidation thereon.

"In the same announcement, Bones told the employees that any concerns from them must be directed to the human resources manager who would then direct them to him and shareholders for clarification.

"Employees forwarded their list of concerns through the aforesaid channel. Major pertinent issues were never responded to, which then obliged the employees to send the same concerns direct to the shareholders but there has been no response," said a source at the company.

Employees are eager to know if they would be paid their retrenchment packages.

If the company is to go into liquidation, the employees would be entitled to terminal benefits accrued to them during the course of employment such as outstanding salaries and leave days due, among other benefits.

Normally, a retrenchment package is given when a going concern no longer requires the services of a particular employee or group of workers.

The employees said on January 8, 2014 UMB went into a Scheme of Arrangement in a bid to ride out of the crisis.

After getting into partnership with PandL (Pty) Limited of South Africa, UBM became known as UBM-PandL (Private) Limited, with the majority shareholder virtually taking over the day-to-day management of the business.

It is said that the major shareholders - Andre Prinsloo, Eduard Prinsloo and Himal Patel - cascaded the management function to Bones and financial director Charles Gambe who then left the organisation early 2017.

Upon Gambe's departure, the finance function was bestowed on finance manager, Glenda Elizabeth Dos Santos.

The Scheme of Arrangement was, however, set-aside on June 18, 2018 by the High Court through an application by one of the parties to the arrangement.

Before it went into the arrangement, UBM had 14 branches in Harare, Bulawayo, Kwekwe, Gweru, Gokwe, Chegutu, Chiredzi, Mutare, Rusape and Karoi.

But by December 2017, all the branches had closed with the exception of Gweru, Harare Timbers – Truss Plant and Graniteside, which had since relocated to Msasa.

Sources said since the start of 2018, business has not been forthcoming due to the fact that the company had not been replenishing stocks hence very minimal sales which hampered entail unsustainable cash flow levels.

"A preview of the whole script on how the company has been functioning compels the employees to believe that the downfall of the company was pre-planned because 90 percent of items which came from PandL South Africa as investment were evidently taken down from their shops' shelves as some were rusty and had rand price tag stickers on them.

"Majority of electrical items, window frames and damp course were not even compliant with Zimbabwean architectural requirements. This is enough evidence that they were getting rid of obsolete stocks in their South African shops.

"Electrical gadgets were soiled to an extent that it's easily recognisable that they were faulty hence returns from customers. It implied these products were not saleable. Local business had to depend on buy-outs in order to realise some meaningful sales," said a company source.

"Instead of expanding as hinted on the agreed Scheme of Arrangement closing of branches became the norm for the past four years of the partnership thus conclusively have to put up with two branches at the end; Harare and Gweru."

UBM Liquidation Doors

Source: Daily News


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