Leading music retailer, Reliable Music Warehouse has entered a fierce legal battle with Gallo after failing to pay back a whopping R23-million it allegedly owes the largest and oldest independent record label in Africa.
Gallo has since submitted an application for the retailer’s liquidation before the Johannesburg High Court.
It is also understood that another company Reliable owes, New Order Investments, brought a similar application before the high court.
It will be a huge blow to the local music industry if the 48-branch-strong Group is liquidated as it is one of the few music retailers who stock over 80% of local content on their shelves.
Two former employees of Reliable, who spoke to Business Report on the condition of anonymity, revealed that the company was technically insolvent last November, but had managed to ward off Gallo for some months before things started falling apart. They attributed the company’s fall to a senior executive who misappropriated monies in the company for his own use.
Reliable is also allegedly failing to pay some of its employees.
| Company: | New Order Investments, Reliable, Reliable Music Warehouse |
| Continent: | Africa |
| Industry Term: | Music Retailer |
| Organization: | Johannesburg High Court |
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