CBZ chickens out on Mliswa

A $3 million loan dispute pitting businessman Mr Temba Mliswa and CBZ Bank has taken a new twist, with both parties now pursuing an out-of-court settlement.

This comes after Mr Mliswa, who is also Member of Parliament for Norton, got a reprieve from the Supreme Court protecting his property from being auctioned over the debt, pending the determination of his application for rescission of default judgment issued by High Court judge Justice Priscilla Chigumba in 2015. Mr Mliswa's lawyer, Mr Tapson Dzvetero of Antonio and Dzvetero, confirmed the latest development in the long drawn civil suit.

"Yes, we won the case in the Supreme Court and it was remitted back to the High Court," said Mr Dzvetero, declining to give finer details of the matter. At this stage the parties are pursuing an out-of-court settlement before a pre-trial conference to be held before a judge as required by rules of the court." Mr Mliswa had his property attached after the High Court issued a default order in favour of the bank, after he failed to attend court.

This prompted Mr Dzvetero to file an application for stay of execution, but the High Court threw it away for lack of urgency. In a bid to save his client's property from going under the hammer, Mr Dzvetero instructed Advocate Thabani Mpofu to appeal at the Supreme Court.

The Supreme Court last year nullified Justice Chigumba's decision and referred the matter back to the High Court for determination of the businessman's application of rescission of the default judgment. The bank sued Mr Mliswa over a $2 million debt emanating from loans advanced to the politician's tobacco company to buy the crop in the 2010 and 2011 seasons.

The commercial bank claims it lent Mliswa's Saltlakes Holdings money to buy tobacco from farmers and the businessman bound himself as surety and co-principal debtor. Saltlakes, the bank claims, did not pay back the loans as per agreement, resulting in the bank filing the lawsuit in which Mliswa and Saltlakes were cited as defendants.

In the summons filed in October 2014, CBZ argued that it released $2 million to Saltlakes to finance the company's business of buying tobacco from farmers. In terms of the agreement signed by the parties on February 17 2011, $1 million was released to Saltlakes, being a carry-over of facilities from the 2010 tobacco buying season.

Another $1 million was released to Saltlakes as working capital to finance the purchase of tobacco in the 2011 season. According to the agreement, Saltlakes was obliged to pay back the first loan of $1 million by December 31, 2011 and the second one expired on December 31, 2012. It was the parties' agreement that Saltlakes would pay collection costs, bank charges and legal costs on an attorney and client scale in the event that the bank sued for non-payment of the debt.

The parties also agreed that interest would be charged on the figure. Saltlakes is said to have breached the agreement and, despite numerous demands, the company failed to repay the loan. By October 6 2014, interest had accrued and the debt stood at $2 745 092,72. The debt has now ballooned to more than $3 million.