NSSA, Econet dismiss Renaissance claim

THE $500 million damages claim brought by Renaissance Financial Holdings Limited and its subsidiaries against the National Social Security Authority, mobile network Econet Wireless Zimbabwe and others is frivolous and should be dismissed with costs, the authority has said.

NSSA denied that RFH suffered damages to the tune of $526, 6 million or any other sum and challenged RFH and its subsidiaries to explain how they determined the extent of damages they suffered.

RFH and its subsidiaries Renaissance Investment Banking Corporation Limited and Renaissance Securities Nominees (Two) last year raised a $526,6 million damages against NSSA, Capital Bank, Econet Wireless, EW Capital Holdings, former Capital Bank curator Mr Reggie Saruchera, the Reserve Bank of Zimbabwe, former directors of RFH, Professor Christopher Chetsanga, Mr Collin Kuhuni and Mrs Monica Mukonoweshuro.

The defendants want the High Court to dismiss the financial group's claim.

The financial group alleged in court papers that the claim for damages was raised due to the losses it suffered as a result of the holding company's loss of principal assets, Renaissance Merchant Bank Limited — subsequently renamed Capital Bank — and Africa First Renaissance Corporation — subsequently renamed First Mutual Limited.

RFH and its subsidiaries believe that the loss of the assets was occasioned by the agreements signed by Professor Chetsanga and other RFH directors.

The companies claimed in the court papers that the former directors had acted without authority and in violation of the provisions of the company's provisions.

"Wherefore the 1st Defendant (NSSA) avers that the claims made by the Plaintiffs jointly and severally are frivolous and vexatious, without foundation, both in fact and at law . . ." NSSA said.

The authority also wants the Law Society to investigate RFH's lawyer Mr Vote Muza of Muza and Nyapadi Legal Practitioners.

NSSA disputed a claim that RFH is still Capital Bank's majority shareholder and denied acting negligently in conducting business.

In the court papers RFH claimed that prior to Capital Bank being placed under recuperative curatorship, RFH had secured $100 million from the FMS group which was due to be invested as equity capital in its subsidiaries.

"For the negligent conduct of the Defendants, the Plaintiff was deprived of the said $100 million equity capital," RFH said.

It further claimed that before Capital Bank was placed under curatorship RFH had secured $40 million from Surya Capital, a European based private equity institution, $4 billion for funding ZESA Holdings through which the holding company would have earned three percent advisory and arrangement commission or fees on the total sum amounting to $120 million.

RFH said it had also secured $1,5 billion for the RFHL Africa Fund where it could have earned $45 million in commission and fees.

The failed financial institution said it lost its principal asset, Capital Bank which it said was the largest and controlling shareholder of First Mutual Holdings, incurring a loss of about $200 million.

It also claimed to have incurred a loss of more than $21 million through the loss of deposit investment in Capital Bank and through illegal misappropriation of shares in First Mutual Limited.

However, NSSA and the other defendants say their actions were above board.

"It is denied that the 1st Defendant (NSSA) acted wrongfully or unlawfully or negligently in connection with the transactions," NSSA said.