News / Local
Obert Mpofu to fight $16 million lawsuit
29 Sep 2015 at 06:35hrs | Views
Macro-economic Planning and Investment Promotion Minister Obert Mpofu, who is facing a $16 million lawsuit for failing to surrender immovable assets to the liquidator of his defunct Allied Bank Limited, has asked for further details of the suit, saying he wants to use them to defend the claim.
In an application for further particulars filed at the High Court on Thursday last week, Minister Mpofu listed the specifics he wants from the liquidator of his bank - the Deposit Protection Corporation (DPC) - to enable him to make intelligent pleadings to the claim.
Further particulars are defined at law as material facts which a party to litigation alleges are true and which that party will seek to prove at trial in support of the relief claimed. The object of particulars is to enable a party to know the case of the opponent so as to avoid surprises.
The claim against Minister Mpofu, his wife Sikhanyisiwe and their three companies - Trebo and Khays (Private) Limited, Khanondo Safaris and Tours (Private) Limited and Moya Security (Private) Limited - allegedly arose after they refused to release assets worth $16 million as part payment of the subscription for the 1,243,797,496 ordinary shares in the capital of Allied Bank at a subscription price of $22.5 million.
In his request for further particulars, Minister Mpofu wants, among many details, a copy of the share subscription agreement between Allied Bank and the first defendant (Trebo and Khays). "What authority did the first defendant have to undertake to transfer to Allied Bank the properties described in the plaintiff's declaration," queried Minister Mpofu.
He also wants details on "what basis is it alleged that the second (Minister Mpofu) and third (Sikhanyisiwe) defendants represent the second to fifth defendants in making of the alleged undertaking on April 5, 2012?" Minister Mpofu also wants to know; how did second to fifth respondents undertake to transfer the properties registered in their name to Allied Bank?
"If such undertaking was contained in a contractual document, a copy is requested," he said. Allied Bank Limited was in February this year placed under liquidation following the cancellation of its operating licence by the Reserve Bank of Zimbabwe in January. The bank had become grossly undercapitalised and faced chronic liquidity challenges.
DPC summons show that in April this year, Trebo and Khays undertook a contractual obligation to transfer to Allied Bank five properties in Bulawayo and one in Harare. The six properties, according to the court papers, have a combined value of $16,790,000 in terms of the subscription agreement between the company and the bank.
In breach of the agreement, DPC says Minister Mpofu refused to surrender the properties prompting the claim against him. Before its closure, Allied Bank had widened its losses to $4,2 million in the six months to June 2014 from $2,4 million recorded in the same period in 2013 due to a decline in operating income and a spike in interest expenses.
The DPC has the capacity to pay off Allied Bank's depositors up to the maximum insured limit of $500 per depositor per account and any balances above $500 will be recompensed through the liquidation process upon realisation of assets.
The DPC is an autonomous statutory body formed in 2003 by the government through the Deposit Corporation Act to administer the Deposit Protection Fund and compensate depositors in the event of a bank closure.
Allied Bank was a member of the Deposit Protection Scheme as membership is mandatory for any banking institution registered in terms of the Banking Act (Chapter 24:20) and the Building Societies Act (Chapter 24:02). The bank was the sixth bank to have its licence cancelled by monetary authorities since the adoption of the multi-currency regime in 2009.
The others were Royal Bank, Genesis Investment Bank, Trust Bank, Interfin Bank and Capital Bank. Minister Mpofu has enlisted the services of Magwaliba and Kwirira law firm to defend the claim, while the DPC has hired Sternford Moyo of Scanlen and Holderness.
In an application for further particulars filed at the High Court on Thursday last week, Minister Mpofu listed the specifics he wants from the liquidator of his bank - the Deposit Protection Corporation (DPC) - to enable him to make intelligent pleadings to the claim.
Further particulars are defined at law as material facts which a party to litigation alleges are true and which that party will seek to prove at trial in support of the relief claimed. The object of particulars is to enable a party to know the case of the opponent so as to avoid surprises.
The claim against Minister Mpofu, his wife Sikhanyisiwe and their three companies - Trebo and Khays (Private) Limited, Khanondo Safaris and Tours (Private) Limited and Moya Security (Private) Limited - allegedly arose after they refused to release assets worth $16 million as part payment of the subscription for the 1,243,797,496 ordinary shares in the capital of Allied Bank at a subscription price of $22.5 million.
In his request for further particulars, Minister Mpofu wants, among many details, a copy of the share subscription agreement between Allied Bank and the first defendant (Trebo and Khays). "What authority did the first defendant have to undertake to transfer to Allied Bank the properties described in the plaintiff's declaration," queried Minister Mpofu.
He also wants details on "what basis is it alleged that the second (Minister Mpofu) and third (Sikhanyisiwe) defendants represent the second to fifth defendants in making of the alleged undertaking on April 5, 2012?" Minister Mpofu also wants to know; how did second to fifth respondents undertake to transfer the properties registered in their name to Allied Bank?
DPC summons show that in April this year, Trebo and Khays undertook a contractual obligation to transfer to Allied Bank five properties in Bulawayo and one in Harare. The six properties, according to the court papers, have a combined value of $16,790,000 in terms of the subscription agreement between the company and the bank.
In breach of the agreement, DPC says Minister Mpofu refused to surrender the properties prompting the claim against him. Before its closure, Allied Bank had widened its losses to $4,2 million in the six months to June 2014 from $2,4 million recorded in the same period in 2013 due to a decline in operating income and a spike in interest expenses.
The DPC has the capacity to pay off Allied Bank's depositors up to the maximum insured limit of $500 per depositor per account and any balances above $500 will be recompensed through the liquidation process upon realisation of assets.
The DPC is an autonomous statutory body formed in 2003 by the government through the Deposit Corporation Act to administer the Deposit Protection Fund and compensate depositors in the event of a bank closure.
Allied Bank was a member of the Deposit Protection Scheme as membership is mandatory for any banking institution registered in terms of the Banking Act (Chapter 24:20) and the Building Societies Act (Chapter 24:02). The bank was the sixth bank to have its licence cancelled by monetary authorities since the adoption of the multi-currency regime in 2009.
The others were Royal Bank, Genesis Investment Bank, Trust Bank, Interfin Bank and Capital Bank. Minister Mpofu has enlisted the services of Magwaliba and Kwirira law firm to defend the claim, while the DPC has hired Sternford Moyo of Scanlen and Holderness.
Source - chronicle
