Over 50 companies in the ICT sector filed for liquidation last year, more than double the 25 that were wound up the previous year.
The Companies and Intellectual Property Registration Office (Cipro) says 52 companies in the computer and related activities sector filed for liquidation last year. An additional two companies were in final liquidation. However, in the previous year, only 25 firms were wound up.
Among last year's casualties were Masana Technologies, Choice Technologies and Music for Pleasure, which used to distribute Microsoft's Xbox gaming console.
Choice Technologies ceased to exist as no one would bail it out after it was placed into liquidation by Square One Solutions. Masana Technologies failed, blaming the City of Johannesburg for not paying it R64 million on time.
Local corporate-focused VOIP business PrimeTel was liquidated in March after the sudden death of its MD, Michael Alter. In addition, Pan-African satellite pay-television broadcaster GTV closed its doors early in the year.
Cipro, a division of the Department of Trade and Industry, includes hardware, software, data processing and other related activities in the sector. It was not able to define the size of the companies, or indicate whether these were shelf companies, or actual operating entities.
On the whole
The 25.2% increase in the total number of liquidations for 2009 was due to increases of 26.9% in voluntary liquidations, from 3 024 to 3 838, and a 6.9% rise in compulsory liquidations, from 276 to 295, according to the latest available information from Statistics SA.
The government statistical agency says, when comparing 2009 with 2008, company liquidations increased 20.1%, while close corporation liquidations increased by 29.9%.
It says the highest numbers of liquidations in 2009 were recorded for financing, insurance, real estate and business services, followed by wholesale and retail trade, catering and accommodation.
Irnest Kaplan, MD of Kaplan Equity Analysts, says 2009 was a difficult year for IT companies as customers held off on purchases and credit was more difficult to get through the banks.
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