Choice liquidation saga continues

By Nicola Mawson for Choice Technologies

Johannesburg, 08 Jul 2009

Three parties are now vying to take over Choice Technologies, after it was placed in liquidation last year.

Deon Botha, from Corporate Liquidators, says all three companies are performing due diligence on Choice and he wants to have a concrete offer on the table by Monday.

Botha, who initially set a 1 July deadline on the liquidation process, says he has not put the company into liquidation - despite the passing of the deadline - in order to try and save the staff's jobs.

So far, four companies have expressed interest in buying Choice Technologies through a scheme of arrangements. One of the parties, ConvergeNet, withdrew from the process last month, without citing reasons.

Botha would not name the three other companies.

Should a scheme of arrangement be implemented, creditors - collectively owed about R100 million - would at least receive some money, and staff would keep their jobs. However, should the matter proceed to liquidation, staff would be without work and creditors would be out of pocket, says Botha.

Black-owned Choice Technologies was placed under liquidation last year, after a R2.8 million dispute, in which Square One claims the money is owed to it by Choice. The JSE-listed Square One Solutions Group obtained the liquidation order, through subsidiary Structured Infrastructure Solutions (SiS), against Choice.

It is understood the dispute between the companies arose from an attempt by Square One to take a 49% stake in Choice, held by the National Empowerment Fund, as well as the remainder of the interest, held by the Choice Group. The initial deal was discussed in April/May last year, and received board approval from Choice.

Choice CEO Semela Tseka said, at the time, that Square One had purchased 100% of SiS - a company that was often subcontracted by Choice to do cabling for customers.

“Square One Solutions then used SiS to put in a claim against Choice for work done on our behalf and monies which they claim were owed to them. The monies they claim are owed to them are in dispute by us, as the work by them was not completed,” he said.