THE High Court has ordered the attachment of Reserve Bank of Zimbabwe property after it failed to pay US$2m for tractors it bought under its farm mechanisation programme in 2008.
Justice Tedias Karwi granted an order last December compelling the central bank to pay US$2,1 million to Farmtec Spares and Implements, failure of which would result in the attachment of RBZ property.
Lawyer Davison Kanokanga of Kanokanga & Associates approached the High Court on behalf of Farmtec and was granted the order after the RBZ had admitted that it owed the company money for the tractors supplied.
According to court papers, the RBZ placed an order of 150 tractors with Farmtec through the Farm Mechanisation and the Agricultural Support Enhancement Facility.
In October 2008, Farmtec delivered 60 tractors valued at US$2,1million and the remaining 90 were to be delivered upon the RBZ’s payment of the initial delivery.
Kanokanga said, in the application, despite numerous calls of demand, the RBZ “has either failed, or neglected to pay the plaintiff the US$2 100 011 due”, which forced Farmtec to approach the court for reprieve.
According to records at the High Court, a letter to the sheriff or the deputy sheriff to attach RBZ movable goods of the value of US$2,1 million has already been issued.
The letter says Farmtec is entitled to the money which it recovered by way of a judgment of the High Court dated December 9 2009.
The sheriff was directed to take possession of the bank’s fixed assets in the event of failing to find movable goods.
The writ of execution listed five fixed RBZ assets in Kariba, Mutare and Harare.
The assets include stand number 548 in Kariba measuring 2 927 square metres registered under the deed of transfer number 11464/89, a stand in Harare’s Greendale measuring 1,6 hectares and registered under deeds of transfer number 5017/83 and another stand number 17613 of Harare Township registered under deed of transfer number 2486/98.
Other properties are stand number 82 Umtali (Mutare) measuring 1 487 square meters and registered as deed number 10541/97 and a plot number 138 of Rodel Township measuring 1,9 hectares registered under deed number 1449/94.
By yesterday it was not clear whether the sheriff had managed to attach any property.
Kanokanga said he had not yet received a return of service document from the sheriff and he would not know what has been attached so far.
The central bank ran many quasi-fiscal operations to bust sanctions.
The facilities that the RBZ created in its numerous quasi-fiscal activities included the Productive Sector Facility, Basic Commodity Supply Side Intervention, Local Authorities Reorientation Programme, the Farm Mechanisation Programme and the Agricultural Support Enhancement Facility which were all financed by printing money.
But with the dollarisation of the economy last January, printing money was rendered useless and the central bank’s lifeblood dried up leaving RBZ governor Gideon Gono with no option but to turn to the treasury for funding.
Gono’s empire started crumbling around him at the inception of the multi-currency system last January which relegated the worthless Zimbabwe dollar to the dustbin, marking the beginning of the fall of the RBZ and its quasi-fiscal activities.
The Farmtec lawsuit is one of several cases against the beleaguered lender of last resort.
The RBZ blames the treasury for under-funding the bank. Finance minister Tendai Biti has refused to adequately fund the bank arguing that there was need for reforms at the bank and that there was need to clip the governor’s wings.