Court to hear Youth League liquidation case

2013-06-06 14:43

The High Court in Johannesburg will hear a liquidation application against the ANC Youth League.

Phil Patlanski, a lawyer for Z2 Presentations, which brought the application, said today the matter was expected to be heard tomorrow morning.

The close corporation trades as University Events Management (UEM).

The application came after the ANC Youth League (ANCYL) failed to pay almost R15 million, including interest, to the contractor for its national congress in Mangaung in the Free State in 2008, when Julius Malema was elected leader.

The sheriff reportedly twice tried to seize youth league assets to pay off the debt, but there were no assets.

In an answering affidavit filed at the court for the youth league, ANC secretary-general Gwede Mantashe said yesterday it was a matter of record that the league’s affairs were “shambolic and chaotic”.

“The respondent at present has no disposable assets and its operations, which are currently limited to auditing its membership and restructuring the chaos, are being funded by the ANC,” said Mantashe.

In his affidavit, Mantashe said the cost of collecting and administering the annual ANCYL membership fee of R12 exceeded that amount. He said the league was not a commercial business and did not operate for profit.

“The respondent, as set out in its constitution, is a voluntary association of persons with the object of pursuing and furthering the ideals of democracy, freedom, and peace through political processes.

“At present, the only goodwill it has is of a political nature and not a commercial nature, and this cannot be sold for money,” said Mantashe.

He argued that the Companies Act would not apply to the ANCYL.

The ANC had made some payments to the contractor, but Mantashe said the party was a separate entity from the league.

The ANC had made the payments because its youth wing did not have the funds. But the ANC had no obligation to take steps to pay the debt, he said.

UEM’s lawyers argue the Insolvency Act applies to the case. In their heads of argument the lawyers say the ANCYL’s affairs could be wound up in accordance with the act.

“The respondent has committed acts of insolvency and is unable to pay its debts as envisaged in section eight of the Insolvency Act,” they say.

A trustee needed to be appointed to establish where the ANCYL’s assets were, since it was an organisation with numerous members who paid annual fees, and it received donations.

Mantashe said appointing a liquidator or a trustee would not gain anything and only be a cost to creditors, as the ANCYL had no assets and no money in its bank account.

“Any investigation by a liquidator or trustee would be at the expense of creditors ... As there is no business, there is no suggestion of any hidden assets or profits which might be uncovered,” he said.

UEM’s lawyers said it was untenable that the league could be found to be “contracting with the world at large giving out the appearance of legitimacy” when it claimed it had no assets.

“A trustee will be able to investigate this and establish the correctness or falsity of the assertions made.”

They argued Mantashe was not authorised to speak on behalf of the ANCYL because he was not one of its office bearers. They would ask the court to dismiss Mantashe’s arguments in his answering affidavit.

Mantashe asked that the application be dismissed with costs.

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