IMBWILI Investments Limited has denied owing Finsbury Investments Limited K650,000 and K550,000 as mortgage and supplementary mortgages, saying it has no knowledge of its alleged debt being assigned to Finsbury by Finance Bank Zambia Limited.
It says it was not consulted and never authorised Finance Bank to transfer debt to Finsbury Investments, a total stranger.
In this matter Finsbury Investments has sued Africa Bank Corporation Zambia Limited and Finance Bank Zambia trading as Atlas Mara in the Lusaka High Court for failing to safeguard its interests with Imbwili Investments.
Finsbury has also sued Imbwili Investments Ltd as the third defendant for failing to fully settle a loan facility amounting to K33,648,819 (unrebased) outstanding as at July 31, 1997 with interest payable at the then current banking rate.
Finsbury Investments said Atlas Mara’s false claims that Imbwili Investments Ltd does not owe any money under the mortgage and supplementary Mortgages are malicious and aimed at causing it economic loss.
In its statement of claim filed in the Commercial Court registry, Finsbury said on June 30, 2016, Atlas Mara became the majority shareholder of Finance Bank Zambia Plc (FBZ), and took over all the assets and liabilities of FBZ after a corporate restructuring process.
It said FBZ no longer has any real operation existence except that its name is maintained on the register of PACRA.
Finsbury Investments stated that Finance Bank prior to the corporate restructuring with Atlas Mara advanced two credit facilities in the sum of K650,000 and K550,000 unrebased (principal sums), to Lunkoto Holdings Limited, Hydrotech Services Limited, Minetech Services Limited and Imbwili Investments (the Group of companies) on August 16, 1989 and March 26, 1991.
It stated that Imbwili is the holding company for Lunkonto, Hydrotech and Minetech.
“By letter dated April 12,1989, authored by one Andrew Kashita as executive chairman and shareholder in Imbwili Investment, requested for opening of accounts and overdraft facilities for Lunkonto, Minetech and Hydrotech. The requested accounts were opened and overdraft facilities were availed by FBZ in a letter dated 28th June 1989,” Finsbury stated.
Finsbury Investments stated that Minetech Services Ltd received a secured overdraft in its current account of up to K100,000 (unrebased), Hydrotech Ltd K300,000 (unrebased) and Lunkonto Holdings Ltd K250,000 (unrebased).
It stated that both mortgages were over farm No.297A/A/1 which at the time was beneficially owned by Imbwili Investments and the securities were duly registered against the property at Ministry of Lands in February 1990 and March 26, 1991 respectively.
Finsbury stated that between January and December 1997, it was assigned the debt owed by Imbwili Investments to Finance Bank following an agreement between it and the bank as sister companies at the time.
It stated that in 1996, on account of default of repayment of the loan amounts owed by Imbwili Investments under the mortgage and supplementary mortagage, FBZ commenced an action against Imbwili Investments in the High Court for foreclosure and sale of farm No. 297/A/1.
On August 21, 1997, justice Irene Mambilima granted an order of judgment in favour of Finance Bank in the sum of K33,648,819 (unrebased) outstanding as at July 31, 1997 with interest payable at the then current bank lending rate from August 1 to August 16, 1997 and thereafter at six per cent, failure to which the bank was at liberty to foreclosure the property.
Finsbury contended that Imbwili Investments owes the principal amount of K650,000 and K550,000 but was adamant to pay the interest portion of the judgment.
It is seeking an order that Atlas Mara’s failure to safeguard its interests with regard to Imbwili Investments amount to the economic tort of inducing loss by unlawful means for which it (Finsbury) is entitled to damages against the defendants.
Finsbury wants an order that Imbwili Investments still owes the interest due under judgment cause number 1996/HP/2892 and for the payment of the total sums owing and outstanding from the third defendant to it under the said judgement and the same to be assessed by the registrar of the High court.
It is seeking an order against Atlas Mara and Finance Bank for damages for breach of contract by the defendants to pay the sums owed to it by Imbwili Investments.
Finsbury is further seeking exemplary and aggravated damages against the defendants for their deliberate, malicious conduct and reckless disregard of its rights.
In its defence, Imbwili Investments admitted to having written to Finance Bank requesting for the mortgages over subdivision One of subdivision A of farm 297a Lusaka and not subdivision A of farm 297 Lusaka.
“The third defendant was not consulted and it never gave any consent to Finance Bank to transfer the debt to Finsbury Investments Investments who is a total stranger to the third defendant and as such the third defendant is and has never been a debtor to the plaintiff (Finsbury). The alleged transaction between the Finance Bank and Finsbury was wrong and illegal,” Imbwili Investment stated.
It claimed that it was not aware that its certificate of title was moved from Finance Bank to Finsbury and never consented to such move which is wrongful and illegal.
Imbwili Investment said Finsbury Investments has come up with wrong calculations contrary to the judgment rendered by justice Mambilima.
Imbwili Investments argued that the said judgment is statue barred or has expired and cannot be enforced by the parties.
It alleged that it paid interest of the said mortgages and does not owe Finsbury Investments any money.
And Atlas Mara and Finance Bank in their defence said there is no legal binding assignment of the debt owed by Imbwili Investments which exists between Finsbury and them.
They claimed that such a document does exist, and Finance Bank will object that such agreement or assignment was illegal and void on the ground of champerty and on grounds of public policy.
“The plaintiff abused its position as shareholder of Finance Bank by pressuring it to insist on interest calculation which were contrary to the High Court order for judgement dated August 21,1997,” Atlas Mara said.
It said Finsbury’s security still exists and it is enforceable at law by way of equitable mortgage.
Atlas Mara further charged that there being no valid assignment of the debt between itself and Finsbury Investments it has no obligation to the complainant is respect of the claim as a consequence of the transaction, therefore Finsbury Investments is not entitled to any of the reliefs being sought because it has not suffered any loss and damage.