HomeBusiness DigestTimba in trouble over US$2,8m loan

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Court documents seen by businessdigest this week show that Kingdom Bank had issued summons to Timba, claiming the principal loan of US$2 million and US$835 948 in interest.

RFHL is cited as the first defendant, while Tolrose (Pvt) Ltd and Timba are the second and third respondents, respectively.

Timba pledged his mine — Tolrose (Pvt) Ltd, more than 180 gold claims, and  a 7% stake in RFHL — as collateral for the loan.

According to the documents, KBL entered into a loan finance agreement to finance Timba’s working capital requirements.

Under the agreement, the loan was supposed to be at the rate of 20% per annum above Libor.  Libor, the London Interbank Offered Rate is the base interest rate that banks charge internationaly when lending to other banks.

Timba also agreed that should he default on his obligations, 3% interest per month above Libor would be calculated from the date of breach of the agreement.

The banker also agreed that in the event he defaulted, he would settle legal costs incurred, including the attorney fees and client scale and collection commission.

Timba also ceded his 7% shareholding in RFHL and mining claims to KBL as security.

“Plaintiff advanced and disbursed  to 1st defendant (RFHL) the sum of US2 000 000 and charged total interest of US$835 948,46, thereby producing a total payable amount of US$2 835 948,46 which 1st defendant (RFHL) has failed to repay plaintiff (KBL) by the due date and remains unpaid to date,”  reads part of the document. “Despite demand, defendants have failed, refused and or neglected to repay to plaintiff the sum of US$2 835 948,46, being the total amount due, and outstanding as the defendants are obliged to, as more fully appears from Annexure “F” being the in duplum schedule attached hereto.”

The interest KBL is claiming was charged at the rate of 3% per month from 1 May 2011.

Timba was unceremoniously forced to step down from the position of CEO of ReNaissance Merchant Bank (RMB) after businessman Jayesh Shah tipped off the Reserve Bank of Zimbabwe that the banker had siphoned off depositors’ funds to retire a loan to him last year.

At Shah’s instigation, the central bank launched investigations into RMB and unearthed shocking incidents of insider lending, rampant abuse of depositors’ funds and general collapse of corporate governance structures.

After Shah mounted pressure on Timba to pay, the banker only managed to settle the loan with funds borrowed from indigenous banks – MetBank and Kingdom Bank Ltd. — Staff Writer.

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