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LACK OF BUSINESS LEADS TO CLOSURE OF CIE MIDAS

24/10/2017 08:24:00 BY KWANELE DHLADHLA

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MBABANE – As the economy continues to show less signs of growth, more companies are suffering the consequences and subsequently closing shop.

CIE Midas, one of the leading spares shops in the kingdom, will be closed by end of this month. The shop is situated at The Hub in Manzini. This has been revealed in an email which was sent to the landlords on October 2, 2017 that has been annexed to court papers in the matter where Hub Limited is demanding payment of E170 000 in arrear rentals. “This correspondence serves to notify you that CIE Midas will be closing business with immediate effect, and will be vacating (the Hub) premises by end of October 2017,” reads the email in part. The Director of Bobs and CIE Midas A.P Zervos explained that the reason for closure was that after he had repeatedly tried to pick up the company was still suffering a drastic loss as there was no business.

“Allow us to communicate that we would like to continue honouring our recent agreement of clearing the rent arrears at E2000 monthly until all debt is cleared and if we acquire funds we shall speed up payments. We shall pay E20 000 rents for September and October 2017,” Zervos said. The director pointed out that they had a healthy business relationship with their landlords and were grateful that they had understood the circumstances that Midas found itself in.
In a founding affidavit, allegations whose veracity is to be determined by the court, it was mentioned that Commercial and Industrial Enterprises (Pty) Ltd trading as CIE Midas had entered into a three year lease agreement with the Hub in respect of shop number 15 at the Hub Building in Manzini. The agreed monthly rental was the sum of E15 000 for the first year, E16 500 for the second year and E18 150 for the third year.

In the affidavit by Jacquelene Keel it was stated that around June 30, 2017 acting on behalf of the Hub, Midas was informed that their rental was outstanding in an amount of E179 859 and therefore in breach of the lease agreement.
Further, it was disclosed that in early August Midas representative Zervos attended a meeting with Keel where it was promised that payment would be made. “The payments made are, however, inconsistent and it is obvious through the respondent’s conduct they have no intention to make good on their promises. Against the backdrop of Midas closing shop, it should be mentioned that the International Monetary Fund (IMF) has projected economic recovery not exceeding one per cent for the Swazi economy.

This strong observation was made by IMF Mission Chief for Swaziland Geremia Palomba after completing article IV visit into the kingdom. Palomba pointed out that the country faces a challenging economic environment.
Palomba mentioned that in 2016, a prolonged drought and a sharp decline in revenue from Southern African Customs Union (SACU) severely hit the economy. The IMF mission head said an expansionary fiscal policy weakened the fiscal accounts and led to the accumulation of domestic arrears.

“Against this background, based on preliminary data, the IMF estimates 2016 growth to stagnate. A muted recovery is envisaged in 2017, as the weaker fiscal position weighs heavily on the outlook. Risks to this outlook are tilted to the downside and include further tightening in budget financing, volatile Southern African Customs Union (SACU) revenue, lower demand for key exports and tightened global monetary conditions,” explained Palomba.