African Legend Indigo came close to being placed under liquidation, after it failed to honour a two-year-old deal to pay over money to JSE-listed Gijima, but has since reached a settlement.
AL Indigo sold the South African arm of BMC Business Service Management to Gijima two years ago, and was meant to collect money from clients and pay it over to Gijima, but failed to do so, says Gijima CFO Carlos Ferreira. "They collected the money, but forgot to pay."
Gijima ran out of patience and had reached the point where it would have needed to sue to recoup what was owed, says Ferreira. In total, AL Indigo owed Gijima R5.5 million, but this has since dropped as the company has paid over some amounts and now owes R2.5 million.
The listed company had several stabs at reaching a settlement and went as far as getting a provisional liquidation order, says Ferreira. However, the companies have now come to an agreement, under which AL Indigo is paying over what it needs to, he notes.
Ferreira says if it continues paying, there will be no need to go to the courts and push for liquidation, although it will do so if the company does not hold up its end. "We are duty bound to collect what's due to us."
AL Indigo chairman Mashudu Tshivhase says although a summons was dispatched, it was never received, as the company had moved offices. He says a friend called to tell him that a notice of a final liquidation hearing had been published in the press.
However, an out-of-court settlement reached at the South Gauteng High Court led to a payment plan, which AL Indigo is honouring, says Tshivhase. He says there is no reason to liquidate AL Indigo, although he could not explain what went wrong with payments, as an acting CIO was appointed, who was meant to ensure money was handed over.
AL Indigo has been through trying times in recent years after the April 2009 spin-off from Datatec, which sold its 55% stake. In 2010, it lost two of its top executives, CEO Michael Jacobus and CFO Manuela Torres and, later that year, rumours circulated that the company was set to fold, but ITWeb was never able to clarify this with AL Indigo.
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