update


Mike’s Chicken gets day in court

POLOKWANE – Mike’s Chicken went to court earlier this year in an attempt to get financial assistance from several state organsisations, including the Department of Rural Development and Land Reform. The legal action was instituted against the State President, the Minister of Rural Development and Land Reform, and the Minister of Agriculture and Rural Development.

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The business that was started in 1981, grew from 5 000 chicks a week to 200 000 chicks a week in July last year. There is a Mike’s Chicken breeder farm and hatchery in Mokopane as well. In 2010 the industry took a dip as food prices escalated and chicken imports forced the prices down resulting in the trading industry becoming tough.

“In July 2013 the property, plant, and equipment were purchased by the state as part of a land reform transaction to enhance black economic empowerment in the agricultural sector. The property, plant, and equipment were transferred to the Department of Rural Development and Land reform for an amount of R137 million,” said Kirk Twine, legal representative of Mike’s Chicken.

In July 2016, Mike’s Chicken went into business rescue and the practitioners immediately re-initiated financing negotiations with the Department of Rural Development and Land Reform, as, due to a number of difficult decisions, the entity was in the process of retrenching 483 of its 600 employees.

“The amount of R1 million was needed for the creditors. In the case of liquidation, no one will receive anything. Government gave a lease agreement, but it was never signed and nothing was forthcoming. No one wants to invest in this business. Since we had no joy coming from the government, we wrote a letter of demand saying that nothing is forthcoming. We then brought an urgent application for the R25 million financial assistance that government promised the company,” Twine added.

“The R25 million is needed to feed the chickens as well as to pay the employees. We will try our best since the state opposed the case.”

The court said on Tuesday, 2 May that they want to get more witnesses before giving a ruling and the case was subsequently postponed until enough witnesses were found.

maretha@nmgroup.co.za

 

  AUTHOR
Maretha Swanepoel
Journalist

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