6 October 2017

Zimbabwe: Minister in U.S.$1 Million Court Storm

Photo: Daily Trust
(File photo).

Renowned sculptor and businessman Dominic Benhura has dragged deputy Mines minister Fred Moyo and his wife Yeyani to the High Court, accusing the couple of swindling him of US$1 023 815 in a botched mining business deal.

Benhura issued summons against the couple, alongside Paul Diamond and Gold Recovery Group (Pvt) Ltd, in July this year and the latter entered their appearance to defend notices on September 27.

In his declaration, Benhura said sometime in October 2012, Moyo and his wife approached him and requested him to partner them in a mining business called Tambanashe Enterprises (Pvt) Ltd, claiming they, together with their co-business partners, had signed all liabilities guarantees for a revolving acceptance credit loan and lease hire facilities, granted by ZB Bank to Tambanashe Enterprises (Pvt) Ltd t/a Lennox Mine.

Benhura said according to the deputy minister, some other co-directors such as Passion Chifamba, Edgar Ndlovu, Bongani Ndlukula, Nathaniel Siwela and Catriona Stone, had signed liabilities guarantees for a revolving acceptance credit loan and lease hire facilities.

"Following this representation, the plaintiff (Benhura) signed the all liabilities guarantee in favour of ZB Bank for Tambanashe Enterprises. At the time of signature of the guarantee, the first defendant (Moyo) knew that the representation was false in that only the second, third and fourth defendants (Yeyani, Diamond and Gold Recovery Group (Pvt) Ltd) had signed respective all liabilities guarantees in favour of ZB Bank for Tambanashe Enterprises," Benhura says.

"As a result of the first defendant's misrepresentation, the plaintiff suffered damages in the sum of US$635 985 and ZAR 1 536 448 (US$112 617) being the loss of contribution to the satisfaction of the ZB Bank's judgement under case number HC1856/14 occasioned by the absence of five other co-debtors from which the plaintiff would have (gotten) contribution or to be absolved by."

According to Benhura, Moyo, his wife and Diamond "directly or indirectly, through corporate vehicles which they control, own controlling stakes in Tambanashe (Pvt) Ltd, OX Mining Ltd and Gold Recovery Group (Pvt) Ltd).

The sculptor further accused the deputy minister of fraudulently accepting and signing summons, on his behalf, which were issued by ZB Bank seeking to recover its money.

Benhura said sometime in March 2014, Moyo and his wife "falsely represented" to Mlotshwa and Company Legal Practitioners that he (Benhura) had been served or was aware of the summons issued against him by ZB Bank and caused the lawyers to issue an appearance to defend purportedly on his behalf.

"ZB Bank subsequently served a notice to plead with the intention to bar Mlotshwa and Company Legal Practitioners, who failed to file any plea as they did not have plaintiff's instructions leading to a default judgement being entered against the plaintiff," Benhura says.

"The first and second defendants knew that the plaintiff did not have knowledge of the summons and through their fraudulent misrepresentation made it impossible for him to put up any defence to the claim thereby causing the plaintiff damages amounting to US$1 023 815."

In addition, and in the alternative, Benhura said the deputy minister and his co-defendants, "acting in common purpose, during the period between August 2012 and May 2015, abused the funds totalling US$776 486 accessed from ZB Bank under the facility, by applying the funds to their personal obligations and the obligations of their firm as opposed to Tambanashe Enterprises working capital requirement".

He further said the alleged abuse of funds by Moyo and his co-defendants, made it impossible for the principal debtor, Tambanashe Enterprises, to meet its obligations in general and for loans by ZB Bank, thereby exposing him to losses.

"The first and second defendants removed and sold various equipment belonging to Tambanashe Enterprises valued at US$467 000.

Had the first and second defendants not dissipated the principal debtor's assets, the degree of exposure to the plaintiff as the surety would have been reduced by the value of the property or the plaintiff would have been absolved by Tambanashe Enterprises in the sum of US$467 000," he says.

The matter is pending in court.

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