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COURT RULES THAT E.TV’S PARENT IS NOT INSOLVENT

Cape Town – An application for the provisional winding-up of Midi Television, the parent company of e-tv, the free-to-air television station, was dismissed with costs in the Cape High Court yesterday. Judge Dennis van Reenen said he was not satisfied that Sprocket Productions, trading as Deadtime, had proved, as it was required to do, that Midi was unable to pay its debts. Deadtime based its claim on the existence of a verbal agreement reached in September 1997 and ratified in December last year in terms of which it would be paid R13 million. The payments were to consist of R2 million up front and thereafter R1 million a month plus VAT. Midi defended the action and denied the existence of an agreement. It said the money it had paid to Deadtime was for its costs, overheads and expenses. Van Reenen said it was clear from Deadtime`s papers that the company had not adequately considered when and where the oral agreement was concluded. Several draft agreements had been completed but no comprehensive agreement with contractual force was ever concluded. Midi Television had succeeded in showing, on a balance of probabilities, that it disputed its indebtedness to Deadtime. The plaintiff had failed to refer to another single other debt that Midi had not paid. Hosken Consolidated Investments had pumped R300 million into the station. It had also given an undertaking to provide further funding to ensure that Midi was capable of paying its debts, the judge said. Midi had proved it had immediate access to credit facilities. Van Reenen said the winding-up application was “par excellence an instance where the applicant should not have instituted a hasty, ill-conceived and ineptly drafted case”. Kanthan Pillay, the head of corporate affairs at e-tv, said yesterday afternoon that the station had always maintained that it was able to pay its debts as and when they become due. It had always disputed its indebtedness to Deadtime. The finding by Van Reenen that e-tv had demonstrated its ability to pay its debts, that Deadtime had not been able to produce a single other example of an unpaid debt and that there were bona fide grounds for disputing indebtedness, vindicated the television station`s position, he said. Pillay said “e-tv would like to extend its thanks to advertisers who have weathered the negative publicity and kept faith. “We are poised for growth and looking forward to a millennium which firmly entrenches e-tv as Africa`s entertainment channel.”

Source: Business Report – Ronnie Morris