16 September 2013

Tanzania: Ambassador, Three Others in Court Over Sh313 Million Loan

THE African Banking Corporation (ABC) Tanzania Limited has sued the former press secretary to the president and Tanzanian Ambassador to Russia, Patrick Chokala and three others before the High Court in Dar es Salaam, demanding repayment of over 313m/- loan.

Other defendants are Ian Junior Cargo Limited, the company which allegedly obtained the loan, Deo Godfrey Mlay and Paul Lazarus Mselewa, alongside the Ambassador, who allegedly guaranteed the credit facility.

Ambassador Chokala and Mr Mselewa have, however, denied any liability. The case is before Judge Njengafibili Mwaikugile and has been set for pre-trial conference on October 28, this year.

On that day, the parties would sit to ascertain whether the filings of pleadings have been completed.

As of now, only Mr Chokala and Mr Mselewa have filed their defence. It is alleged that on September 6, 2011, Ian Junior Cargo Limited (first defendant) and ABC (plaintiff) entered into a credit facility agreement whereby the former was granted loan of 300m/- to finance the supply of 5 000 metric tonnes of gypsum to Tanzania Portland Cement Company Limited.

"Each of the defendants executed a personal guarantee thereby guaranteeing repayment of 300,000,000/- plus interests, costs and any other charges thereon," reads part of plaint of the suit lodged in court by lawyers from GRK Advocates, including James Kabakama.

Furthermore, it is alleged, Mr Mlay mortgaged his property located on Plot Number 709 Block X, Tabata area in Ilala Municipality, Dar es Salaam with Certificate Title number 8242 in favour of the plaintiff to secure repayment of the loan.

The loan allegedly attracted interest at the rate of 20 per cent per annum and was to be fully paid within 90 days from the date of disbursement. "Contrary to the express terms of the loan agreement, the first defendant failed to repay the debt.

Up to and by January 7, 2013, the sum of 313,842,955.53 was due on account of the first defendant," it is further stated in the plaint.

Following the default, the plaintiff allegedly issued statutory notice to the borrower to repay the loan and further issued demand notices to each of the guarantors.

Despite various reminders and demands, the defendants have allegedly neglected and refused or ignored to pay as demanded or at all.

The ABC, therefore, is requesting the court to order the defendants to pay the 313,842,955.53, interests at the rate of 20 per cent per annum from January 8, this year, to the date of judgment. It also seeks orders for vacant possession and sale of the mortgaged house and payments of costs of the suit.

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