Metro experienced serious cash flow problems and the monthly, and later quarterly dividends, were discontinued. On 26 February 2000,75 persons who invested in the liquidated Zuchiro, Metro shareholders and persons who loaned money to Holsthauzen in his personal capacity, held a meeting at the Holiday Inn Garden Court at the Johannesburg International Airport. The minutes if this meeting were made available to officials of the Committee. The purpose of the meeting was to "... ascertain valid reasons for the apparent impending collapse of the said group (Metro) with a view to restructuring where necessary to prevent insolvency and resultant loss of investors’ capital and interest claims", it was minuted that 66 (88 per cent) of those present wished to "... salvage and grow the company under sound management". The following are some of the resolutions that were unanimously taken at the meeting:
| a) |
A number of shareholders would be appointed as committee members (the Metro committee) with immediate effect to ascertain the financial status of Metro. |
| b) |
Holsthauzen would require the written consent of the Metro committee before undertaking any expenditures of a capital nature. He would also not directly or indirectly initiate liquidation procedures whether in Metro’s or his own names. |
| c) |
A Metro committee member would be appointed as a co-signatory of all cheques issued by Metro. |
| d) |
A "pruning" operation would be immediately instituted to ensure the closure of loss making branches |
| e) |
All investors were to be treated equally and no interest payments or capital repayments were to made before the Metro committee reported back to the investors by 20 March 2000. The investors were described as "... regardless of whether they purchased shares, or whether investments were lodged with Metro Cash Loans Limited, Metro Investments cc or C Holsthauzen". |
| f) |
An independent auditor would be appointed to investigate on behalf of the Metro committee and to report any irregularities in trading and assist in implementing the necessary financial controls. |
| g) |
Metro would operate "... according to the terms and conditions required by the Companies’ Act". |
Officials of the Committee met with members of the Metro committee at the offices of the Committee on 10 May 2000. They said that Holsthauzen unconditionally agreed with the resolutions taken at the meeting of investors but that he had yet to implement the resolutions. The "pruning" operation discussed above was obviously not possible because Metro’s accounting system was not designed to identify profit earning or loss making branches.
Maintenance Act, 1998
