Denis and Thomas Tembo are the only shareholders and directors of Kufumaishungu (Pvt) Ltd a company duly registered and operating in terms of the laws of Zimbabwe. The company manufactures protective clothing which is used by ordinary cyclists and traffic controllers. The company was incorporated in 2005 and the latest audit statement shows that the liabilities of the company exceed its assets and that the company is unable to pay debts owed to various suppliers in the sum of $10 billion dollars. About a month ago a cheque for $2 million dollars in favour of one such creditor Shoko Enterprises (Pvt) Ltd was returned to the creditors marked ‘Refer to Drawer’.Added to this, the company’s major asset, a factory in the industrial sites of Harare, was burnt down to ashes in a fire caused by an electrical fault. Due to the financial difficulties the company was facing, the factory was not insured and all the workers have been sent home.Shoko Enterprises would like to institute an action for the compulsory winding up of the company.Required:Advise Shoko Enterprises of its chances of success. (10 marks)
