Sharika Regchand
News Editor
3 minute read
26 Apr 2021
15:03

Court intervenes as Pietermaritzburg mall business deal turns sour

Sharika Regchand

The Pietermaritzburg high court has had to intervene in a row between two businessmen over possession of Gizmolab Kiosk at the Liberty Midlands Mall.

The Pietermaritzburg high court has had to intervene in a row between two businessmen over possession of Gizmolab Kiosk at the Liberty Midlands Mall.

On Friday, the new owner of Gizmolab Kiosk was granted permission by the high court to occupy the property.

This follows a dispute between two businessmen — Shabaaz Liaqat, the new owner, and Neilin Chetty, the previous owner — over who should have the business. In March, the kiosk ended up in Chetty’s hands, prompting Liaqat to instruct advocate Brad Osborne to bring an urgent application to the court for him to possess the business.

On Friday, the court ruled in Liaqat’s favour.

Turnover
In February it became clear, he alleged, that Chetty had overstated the turnover of the shop — at R450 000 a month — said Liaqat. He added that from the time he took over, it averaged R250 000 a month in turnover.

Liaqat said in court papers that he entered into an agreement with Chetty to purchase his business in November. It was agreed that Liaqat would take over the kiosk from the end of that month.

He said he bought the business for R1,5 million.

The amount was to be paid in instalments. The first instalment was R250 000, and thereafter further payments of R180 000 a month were to be made.

In addition, Liaqat said he was responsible for the shop’s monthly rental of R31 000. He complied with his side of the agreement, he said.

In February it became clear, he alleged, that Chetty had overstated the turnover of the shop — at R450 000 a month — said Liaqat. He added that from the time he took over, it averaged R250 000 a month in turnover.

A technician employed at Gizmolab, who previously worked for Chetty, told him that in the six months prior to him buying the shop, the average turnover was R260 000 a month.

He added that he then asked his attorneys for advice. They said he should continue paying the instalments, but into their trust account.

Kicked out

When staff refused, police were called and said that Liaqat must be allowed to trade until he is evicted.

Later in the day, he said his staff were nonetheless kicked out by the guards.

Liaqat added that he also informed Chetty of his dissatisfaction about the purchase price. That month, he said he asked for proof from Chetty of the turnover, but none was received.

Chetty’s attorney demanded he continue to make payment in March or the agreement would be cancelled and they would take possession of the business.

His attorney replied and raised a dispute about the purchase price. Later that month, Liaqat said Chetty’s attorney wrote back and threatened to take the business back if the entire balance of R710 000 was not paid.

Two days afterwards Chetty took away the keys from one of the employees, he said. The shop was opened the following day with a spare set of keys.

He added that security staff from the mall instructed his employees to leave so that Chetty’s employees could trade. When staff refused, police were called and said that Liaqat must be allowed to trade until he is evicted.

Later in the day, he said his staff were nonetheless kicked out by the guards.

Bid to renegotiate
He said that in February Liaqat tried to renegotiate the terms of the sale agreement and the purchase price, falsely claiming misrepresentation of the historic sale figures.

He said Chetty changed the locks and took possession of the shop.

Chetty, on the other hand, said Liaqat, through his employees, had voluntarily surrendered the shop to him on March 31.

He said that in February Liaqat tried to renegotiate the terms of the sale agreement and the purchase price, falsely claiming misrepresentation of the historic sale figures.

Chetty said Liaqat had failed to comply with the agreements.

He also denied that he threatened to take control of the business if the balance was not paid.

However, Chetty said that he had informed Liaqat of his intention to retake lawful possession of the business activity if the monthly rental and the instalment due on March 25 was not paid.