World Economy

Zimbabwe Auctioneers Sink Teeth in Economic Strugglers

Zimbabwe Auctioneers Sink Teeth in Economic StrugglersZimbabwe Auctioneers Sink Teeth in Economic Strugglers

As the Zimbabwe economy continues to choke, throwing workers onto the streets and companies closing down, there have been a few smiles elsewhere as a result of this carnage. It is the auctioneer who is smiling all the way to the bank.

And as fate would have it, some of the banks are also at the mercy of the auctioneer whose steady business has seen a sharp rise in fortunes in the current economic environment, NewsNow reported.

As the carnage from the economic mess continues, the courts have been battling with the increasing number of cases requiring closure to commercial executions.

Master of High Court, Eldard Mutasa, recently said commercial cases were choking the judicial system.

On Wednesday alone, the court received a record breaking 17 cases of companies under judicial management and liquidation.

According to Mutasa, companies have been filing an increasing number of lawsuits against their clients to recover unpaid loans and in most cases ending up at the auctioneer’s guillotine.

Harare-based analyst Issis Mwale said despite the mystery of their profits, auction houses have been making a killing of late.

“In an otherwise slow environment, they are getting business more often than not. And as you know, when a company goes into liquidation the first batch of expenses covered are the liquidation costs, auction services included,” Mwale said.

Mwale, however, cautioned that the presence of business was not synonymous with great profits, as auction sale companies suffer from their own competition, as well as the unfavorable economic context that is affecting their development.

“The thing is in general their situation is a lot better compared to say, the people in manufacturing or other sectors not feeding on others when they collapse,” she added.

The worsening economic situation has seen both companies and individuals losing their assets as auctioneers sank their teeth in outstanding cases to fetch money on behalf of the instructing clients.

Among those that have been vicious in trying to recover what they are owed, are leading commercial banks that are among companies seriously affected by the downturn in economic fortunes of their clients.

Zimbabwe banks are owed a combined $750 million by defaulting customers who include companies and politicians.

These non-performing loans have seen banks take tough measures to recover the money by attaching assets that include properties which have been auctioned off.