Eleven People’s Trading Centre (PTC) former directors and the defunct firm’s shareholders Press Corporation plc risk being declared liable for the liquidation of the retail chain stores in 2022.
This follows a request by two private firms—Rab Processors Limited and A1 Enterprises Limited—to the provisional liquidator the Registrar of Companies, to make an application to the High Court Commercial Division for the same.
The two companies, through lawyer Chancy Gondwe, believe PTC’s liquidation was unfortunate and regrettable because the directors and shareholders allowed it to continue operating when they knew it was insolvent.
In a letter addressed to the provisional liquidator, the companies want the office to make an application to the court to have the directors and shareholders of the insolvent company declared liable and be made to contribute to the company’s assets.
At the time of liquidation, PTC was owing Rab Processors Limited and A1 Enterprises Limited about K489 million.
“They allowed the company [PTC] to continue trading with full knowledge that the company was insolvent and our clients believe that this conduct of trading was motivated by dishonesty.
“Further, the incompetence on the part of directors of the insolvent company was left unchecked by the shareholders [Press Corporation Plc] and as such the directors and shareholders who carried on the business of the company in a reckless manner ought to be personally responsible as per the provisions of Section 187 of the Insolvency Act,” reads the letter dated March 17 2025.
The directors are former Press Corporation plc group chief executive officer George Patridge, John Biziwick, Elizabeth Mafeni, James Kamwachale Khomba, Rhoda Bakuwa, David Saeluzika, the late Pius Mulipa, J. Evans, J. Madondo, J. Kamsesa and R. Kunjawa.
According to the letter, the directors failed in their duties, and under the Companies Act, their failure to furnish signed financial statements to Tafika Holding Limited (THL) which had earlier expressed interest to buy the firm, put off certain financers who were able and willing to pump funds into the company.
Further, the directors and shareholders were forewarned by external auditors that the continued losses and net current liability positions raised questions about the ability of the insolvent company to continue as a going concern.
“This is a testament of recklessness and breach of statutory duty on the part of the directors of the insolvent company.
“Had the signed financial statements been furnished timely to Tafika Holdings Limited by the directors, chances were there that the company would have been saved,” reads the letter.
According to the 2020 Press Corporation plc Annual Report, the directors believed that its subsidiary company would continue as a growing concern based on strategic plans that they had put in place.
This belief was made despite the directors knowing that this was a key audit matter as per the Deloitte Malawi Report, according to the two private firms.
On the basis of this, Rab Processors Limited and A1 Enterprises Limited want the directors and shareholders to make a contribution to the insolvent company’s assets to meet the outstanding debts owed to them and all other creditors.
“On the basis of the foregoing, we are of the view that the directors are liable for the insolvency of People’s Trading Centre and as such they should be liable to contribute towards the company’s assets,” reads the letter.
The Registrar of Companies Chikumbutso Namelo said in a WhatsApp response that he had nothing to say on the matter while Press Corporation plc group chief executive officer Ronald Mangani did not respond to our inquiry.
However, Gondwe said in an interview, that the provisional liquidator was given 14 days to address the issues raised against the wrongful trading by the director “but we have not gotten any response so we will be pursuing the matter in court”.
In October 2022, the High Court Commercial Division ordered that PTC be liquidated and closed completely without an option of a takeover by another investor Tafika Holdings Limited (THL) owing to its high state of debts.
The South Africa-based THL acquired PTC after the conglomerate Press Corporation plc disposed of its 100 percent stake in the struggling retail chain store to it in March 2022.
PTC had been struggling with huge outstanding debts and employee issues making the acquisition by the trading company, who had been re-branding South Africa’s popular chain stores SPAR Stores as People’s Stores, a timely move.
But in July 2022, THL chairperson and chief executive officer Arson Malola whose aim was to revitalise the franchise and expand its presence in the country said they were unable to invest in it and strategically change the business because they were waiting for a nod from the market regulator.
The Competition and Fair Trading Commission (CFTC) approved PTC’s Sale and Purchase Agreement on May 30 2022.
As part of the transaction, Press Corporation plc took over K12.5 billion of the liabilities while THL inherited about K6 billion of the debts in lieu of the purchase price.
Registered in 1973, PTC was the first retail chain store to operate in the country but over the past 20 years, it had been closing down stores from over 135 nationwide to only 20 stores by 2022 confined in Lilongwe, Blantyre and Zomba operating under the brand names of Spar, People’s Metro, People’s Express and Food Lovers Market.
