OWN CORRESPONDENT, Cape Town | Wednesday
THE Cape High Court has granted a secret order for an inquiry into LeisureNet, the embattled health and entertainment company, according to the daily Business Report.
The inquiry, in terms of section 417 of the Companies Act, was brought in secret in a bid to prevent possibly wayward directors from hiding information about actions they or the company may have taken.
An inquiry of this nature can only be called if the liquidators or a creditor believes there are matters which require further investigation, the newspaper said.
It is understood that Peter Hodes, a member of the Cape Bar, has been appointed as commissioner. Hodes will have wide powers in terms of the Companies Act and will be able to subpoena any director and order the availability of any document, book or computer record relevant to the operation of the company before it went under.
The directors are compelled to answer all questions, even if the answers were incriminating.
The order granting the enquiry is secret and was granted on the day last week that LeisureNet was placed in final liquidation. By September 30 it owed various banks liabilities amounting to R371,9m.
Business Day said these liabilities were owed to the International Bank of South Africa (R115,9m), Wesbank (R4,2m), BoE Limited (R19,7m), Cape of Good Hope (R3,6m), Barclays Bank (R25m), Stannic (R3,4m), Saambou (R7,5m), Absa Bank (R13,6m), (Bankfin R14,5m), Rand Merchant Bank (R6,2m), Nedbank (R79m), PSG Bank (R15m), Marriot Merchant Bank (R1,8m), Citibank (R17,4m) and Commerzbank (R45,1m).
LeisureNet owns 85 gymnasiums in South Africa and a Planet Hollywood franchise in the V&A Waterfront, and has a 50% stake in Millennium Expotainment, which owns the Imax theatres.
The company employs about 5222 staff and has more than 900000 health club members countrywide.
LeisureNet owned 57,8% of the issued share capital in Healthland International, which had 17 subsidiaries which, in turn, owned 22 operating health clubs and 10 clubs in development in the UK, Spain, Germany, Australia, New Zealand, France, Sweden and Belgium.
The court was told that the aggressive international expansion of Healthland, involving the financial commitment of more than R82m, had strained LeisureNet’s management and financial resources.