News / National
Access Finance legal fight not good for money transfer trust issues
15 Oct 2023 at 16:49hrs | Views
The dispute between shareholders of Access Finance Group regarding the sale of shares has intensified, with one party favoring arbitration while the other prefers a legal process.
According to a High Court application, Access Finance Group is advocating for arbitration to resolve outstanding issues rather than pursuing a court action. The company is facing delays in transferring properties or making full payments to former shareholder and managing director Senziwani Sikhosana due to the unavailability of title deeds.
Access Finance Group is employing various technical arguments, including jurisdiction, locus standi, and relief incompetence, to evade their responsibilities and obstruct the process.
One significant issue is the absence of title deeds for the properties involved in the share sale transaction. Additionally, a 15% Value Added Tax (VAT) on a real estate development worth at least US$3.9 million has not been paid to the Zimbabwe Revenue Authority (Zimra), posing a major obstacle.
The transfer of land developed by a registered property developer is subject to a 15% VAT, meaning Access Finance Group owes Zimra a minimum of US$585,000. This amount could increase to over US$600,000, considering the estimated value of the property development falls between US$3.9 million and US$4.4 million.
The Zimra tax issue has significantly complicated the sale of shares transaction. Senziwani Sikhosana, a former shareholder and managing director of Access Finance, along with his business entities, has taken former CEO Singathini Raymond Chigogwana and associated companies to court over the title deeds of townhouses valued at US$320,000.
These former business partners, embroiled in a bitter shareholding dispute, are currently locked in a legal battle over a real estate development, specifically No. 36 Mountbatten Complex in Marlborough, Harare, which consists of 37 townhouse units valued at a minimum of US$3.9 million. Three of these properties are subject to the court case.
Chigogwana and Sikhosana, who previously ran several companies together, including Access Forex (Pvt) Ltd, Access Finance (Pvt) Ltd, Tara Capital (Pvt) Ltd, Thirty-Six Mountbatten (Pvt) Ltd, and Access Forex SA (Pty) Ltd, became embroiled in a bitter shareholding dispute that led to the court action.
In the High Court case HC1007/23, the applicants are Sikhosana and his entities Ferden Investments, Rock Drill Mining, and Seanmart Investments, while the respondents are Chigogwana, Bwerinofa, Thirty-Six Mountbatten, Access Finance, Access Forex, Tara Capital, The Sheriff of the High Court, and the Registrar of Deeds and Companies.
According to court documents, Sikhosana is seeking to have Chigogwana transfer the properties, which were part of their separation settlement, in either real estate or cash form. He also wants the court to issue an order to attach his former partner's assets if this is not done.
Chigogwana, on the other hand, wants Sikhosana to pay all transfer taxes, fees, and costs associated with the deal. According to Clause 9 of the agreement to sell shares and property, as well as the Share Purchase Agreement (SPA), Sikhosana has the right to prompt Chigogwana to address the issue within 14 days. If the breach is not rectified, he can cancel the agreement or seek redress during the case.
Chigogwana, as the CEO, held a 56% share, Sikhosana, as the managing director, held 20%, and their chairman, Isau Bwerinofa, held 24%. However, Bwerinofa is contesting Sikhosana's claims in court, arguing that since there is a dispute related to the SPA, the matter should be settled through arbitration, not in court.
Bwerinofa has raised several issues against Sikhosana, including jurisdiction, locus standi, relief incompetence, adherence to the agreement's terms, and the need for arbitration. He contends that Access Finance cannot provide Sikhosana with his title deeds due to the outstanding VAT.
Regarding cash payments, Bwerinofa believes that this matter should also be subject to arbitration. In his response, Bwerinofa raised various preliminary legal technicalities.
He argued that the court lacks the jurisdiction to hear Sikhosana's application, citing Clause 21.1 of the SPA, which mandates arbitration for resolving disputes related to the agreement. Additionally, Bwerinofa maintained that Sikhosana is seeking an order that the court cannot issue, rendering the relief incompetent.
Bwerinofa also questioned Sikhosana's right and capacity to bring the application before the court. He insists that the matter must be resolved through arbitration, not in a court of law.
The case is pending a hearing.
According to a High Court application, Access Finance Group is advocating for arbitration to resolve outstanding issues rather than pursuing a court action. The company is facing delays in transferring properties or making full payments to former shareholder and managing director Senziwani Sikhosana due to the unavailability of title deeds.
Access Finance Group is employing various technical arguments, including jurisdiction, locus standi, and relief incompetence, to evade their responsibilities and obstruct the process.
One significant issue is the absence of title deeds for the properties involved in the share sale transaction. Additionally, a 15% Value Added Tax (VAT) on a real estate development worth at least US$3.9 million has not been paid to the Zimbabwe Revenue Authority (Zimra), posing a major obstacle.
The transfer of land developed by a registered property developer is subject to a 15% VAT, meaning Access Finance Group owes Zimra a minimum of US$585,000. This amount could increase to over US$600,000, considering the estimated value of the property development falls between US$3.9 million and US$4.4 million.
The Zimra tax issue has significantly complicated the sale of shares transaction. Senziwani Sikhosana, a former shareholder and managing director of Access Finance, along with his business entities, has taken former CEO Singathini Raymond Chigogwana and associated companies to court over the title deeds of townhouses valued at US$320,000.
These former business partners, embroiled in a bitter shareholding dispute, are currently locked in a legal battle over a real estate development, specifically No. 36 Mountbatten Complex in Marlborough, Harare, which consists of 37 townhouse units valued at a minimum of US$3.9 million. Three of these properties are subject to the court case.
Chigogwana and Sikhosana, who previously ran several companies together, including Access Forex (Pvt) Ltd, Access Finance (Pvt) Ltd, Tara Capital (Pvt) Ltd, Thirty-Six Mountbatten (Pvt) Ltd, and Access Forex SA (Pty) Ltd, became embroiled in a bitter shareholding dispute that led to the court action.
According to court documents, Sikhosana is seeking to have Chigogwana transfer the properties, which were part of their separation settlement, in either real estate or cash form. He also wants the court to issue an order to attach his former partner's assets if this is not done.
Chigogwana, on the other hand, wants Sikhosana to pay all transfer taxes, fees, and costs associated with the deal. According to Clause 9 of the agreement to sell shares and property, as well as the Share Purchase Agreement (SPA), Sikhosana has the right to prompt Chigogwana to address the issue within 14 days. If the breach is not rectified, he can cancel the agreement or seek redress during the case.
Chigogwana, as the CEO, held a 56% share, Sikhosana, as the managing director, held 20%, and their chairman, Isau Bwerinofa, held 24%. However, Bwerinofa is contesting Sikhosana's claims in court, arguing that since there is a dispute related to the SPA, the matter should be settled through arbitration, not in court.
Bwerinofa has raised several issues against Sikhosana, including jurisdiction, locus standi, relief incompetence, adherence to the agreement's terms, and the need for arbitration. He contends that Access Finance cannot provide Sikhosana with his title deeds due to the outstanding VAT.
Regarding cash payments, Bwerinofa believes that this matter should also be subject to arbitration. In his response, Bwerinofa raised various preliminary legal technicalities.
He argued that the court lacks the jurisdiction to hear Sikhosana's application, citing Clause 21.1 of the SPA, which mandates arbitration for resolving disputes related to the agreement. Additionally, Bwerinofa maintained that Sikhosana is seeking an order that the court cannot issue, rendering the relief incompetent.
Bwerinofa also questioned Sikhosana's right and capacity to bring the application before the court. He insists that the matter must be resolved through arbitration, not in a court of law.
The case is pending a hearing.
Source - NewZimbabwe
