Politically connected businessman Ze Nxumalo is fighting an attempt to place his property company, Zig Property Management, into liquidation, arguing that the winding-up application is being used to force payment of a debt he says is genuinely disputed.
The application was brought by Vhazwimi Factors, a financial services company associated with businessman Steve Motsumi. Nxumalo, however, has hit back in a 58-page answering affidavit filed in the Johannesburg high court on August 17, describing the proceedings as an abuse of the court process.
“The alleged indebtedness on which Vhazwimi relies is disputed on bona fide and reasonable grounds,” Nxumalo states in the affidavit.
“The full outstanding amount was not due and payable by the end of February 2026. Zig has been and continues to make payments in respect of the facility, as it has done in the past. Vhazwimi is attempting to collect a debt that is not due and payable, even though Zig is servicing it.”
According to reports, Nxumalo is asking the court to dismiss the winding-up application with costs, alternatively to stay the matter pending the outcome of separate legal proceedings involving the same alleged debt.
R2.9m dispute and a different version of the funding deal
The dispute centres on money advanced to Zig Property Management by Vhazwimi. Earlier court papers alleged that Zig owed about R2.9 million and that Nxumalo had signed a personal suretyship, potentially exposing him personally to the debt. Vhazwimi has also pursued separate action against Nxumalo in his capacity as surety.
Nxumalo’s latest affidavit presents a sharply different version of the arrangement.
He argues that the parties had entered into a revolving funding facility, which he compares to an overdraft arrangement, rather than a conventional loan requiring the entire outstanding balance to be repaid by a fixed date.
According to Nxumalo, Zig had access to further funding after substantially repaying previous amounts drawn. He says the original facility amounted to R4 million and that the company had already repaid R2 million, including a R500,000 payment made in June.
“The payment arrangement was sent in response to a demand that did not reflect the true agreement between the parties,” Nxumalo says in his affidavit, maintaining that the February deadline relied upon by Vhazwimi was inconsistent with the actual funding agreement.
Why the liquidation bid is legally significant
The fight is not simply about whether money is owed, but whether Vhazwimi can use liquidation proceedings to recover a disputed debt.
A winding-up application is a drastic legal remedy because, if granted, it could place a company’s affairs under the control of a liquidator and expose its assets to claims by creditors.
Nxumalo argues that the alleged debt is already the subject of separate action proceedings against him personally and that Vhazwimi should not be allowed to use insolvency proceedings as additional pressure.
“The present application to have Zig wound up is an abuse of this court’s process,” Nxumalo states.
“This is because Vhazwimi is effectively using this application to enforce payment of a debt that I dispute is due and payable.”
His legal position is that the same alleged indebtedness cannot be used simultaneously to pursue him personally as surety while also being used as the basis to liquidate Zig without the underlying dispute first being properly determined.
Nxumalo also says Zig’s legal team has taken exception to Vhazwimi’s particulars of claim in the separate action and that further legal steps are expected.
Nxumalo disputes claims that Zig is insolvent
A central part of Vhazwimi’s case is the contention that Zig is unable to meet its financial obligations.
Nxumalo disputes this and says the company remains commercially solvent.
According to his affidavit, Zig has approximately R30 million in assets against liabilities of about R23 million. He says the company is able to meet its current debts and intends relying on independent valuations of its property holdings when the matter is heard.
“Vhazwimi seeks to wind up a company that is both factually and commercially solvent,” Nxumalo states.
“It seeks to do so despite the fact that Zig can, and does, meet its current debts and that its assets far exceed its liabilities.”
Nxumalo’s affidavit also includes a cash-flow forecast projecting monthly net revenue of R218,000 and annual net revenue of R2.616 million by the end of July 2027.
From business relationship to bitter court battle
The latest court battle marks a dramatic deterioration in the relationship between Nxumalo and Motsumi, whose names have previously surfaced in testimony before the Madlanga Commission of Inquiry.
Former SAPS Organised Crime Unit head Maj-Gen Richard Shiburi previously told the commission that he feared Motsumi and described him as being close to Nxumalo. Their relationship has also been linked to previous work in the taxi industry, according to earlier reporting.
The dispute has also unfolded against wider scrutiny of Motsumi’s business interests. During testimony at the Madlanga Commission on August 17, businessman Vusimuzi “Cat” Matlala said that a company linked to Motsumi had lent and advanced R5 million to one of his companies.
Sandton home was previously drawn into the dispute
The current liquidation fight follows earlier legal action that put Nxumalo’s personal property at risk.
In June, Vhazwimi moved to enforce Nxumalo’s alleged personal suretyship over the approximately R2.9 million debt and court papers indicated that his Morningside, Sandton home could potentially be targeted if the creditor obtained judgment and payment was not made. Nxumalo had proposed a payment arrangement involving instalments, but Vhazwimi alleged that the arrangement was not honoured.
At the time, court papers quoted lawyers for Vhazwimi as warning that legal proceedings would follow if payment arrangements were not made.
The latest affidavit, however, suggests Nxumalo is now challenging the fundamental basis on which that demand was made, arguing that his proposed payment arrangement should not be treated as an admission that the full debt was immediately due.
The Johannesburg high court will ultimately have to determine whether Vhazwimi has established grounds to place Zig Property Management into liquidation or whether Nxumalo’s argument that the debt is genuinely disputed and the company remains solvent should prevent the winding-up bid from succeeding.
