4 February 2013

Tanzania: Defendants Seek Dismissal of Sh8 Billion Loan Case

THE Chairman of Chama Cha Mapinduzi (CCM), Dar es Salaam Region, Ramadhani Madabida and Tanzania Pharmaceutical Industries Limited, have asked the High Court, to dismiss the commercial case lodged by Barclays Bank Tanzania, demanding repayment of over 8bn/- loan facility.

In their separate written statements of defence lodged at the High Court's Commercial Division in Dar es Salaam through legal services of Advocate Dennis Msafiri, the duo denied any liabilities as the claimed amount has been fully and timely paid and, thus, the demands by the bank for repayment was untenable.

"The alleged claim for an outstanding sum of 4,551,492.86 US dollars as term loan is unfounded and misconceived. The entire principal sum availed together with any and all lawfully accrued interest or interests thereto have been fully and timely repaid to the plaintiff (bank)," reads one of the statements.

Equally, the statement says, the outstanding letter of credit of 74,294.86 US dollars was fully secured by cash cover, in euro currency, in the possession of bank, and other 10,501,993/- had been availed in foreign currencies, hence, there was no money overdrawn, authorized or unauthorized in local currency.

In the suit, the bank alleges that Tanzania Pharmaceutical Industries Limited is liable for payment of the amount as principal borrower while Mr Madabida and two other defendants are jointly answerable to Barclays bank pursuant to their obligations under their respective personal guarantees.

Other defendants in the suit set for mention on February 12, before Judge Kassim Nyangarika are Salum Shamte and Zarina Madabida. In their defence, the pharmaceutical company notes that it was availed with the loan, while Mr Madabida had guaranteed some of the facilities.

But Mr Madabida states that "the said guarantee is ineffectual having outlived its purpose as the first defendant (Tanzania Pharmaceutical Industries Limited) has fully and timely repaid all moneys under the credit facilities. (I) was discharged from liable following variations made."

According to the plaint of the suit, on diverse dates between 2002 and 2008, the bank allegedly availed credit facilities to the company and in the years 2009, 2010 and 2011, the facilities were varied on, or amended as agreed between the parties.

But Mr Madabida claims that such amendments were made without his consent while the Pharmaceutical Company states that such variations were "wrongly made based on non-existent liability and as such all documents representing the same were without effect and inconsequential."

In addition, the two defendants state in their separate statements that they received some demands and reminders from the bank on repayment of the loan, but could not be acted upon as there was no any indebtedness by the company, thus there was no failure or negligence to honour them.

Copyright © 2013 Tanzania Daily News. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.