Businessman Zachary Wazara has issued summons to compel AfrAsia Kingdom Bank to uphold an agreement the bank signed to take over his company early this year.
Report by Chris Muronzi
In court papers gleened by businessdigest, Wazara through his lawyers — Kantor & Immerman — cites Lalela Trading, AfrAsia Kingdom Bank, Valley Technologies and Crustmoon Investments as defendents in the case.
Wazara wants a sale of shares agreement signed between Spiritage Telecomms (Private) Limited, Connect lnvestments (Private) Limited, Valley Technologies (Private) Limited, VNet (Private) Limited, Lalela Trading (Private) Limited and Crustmoon (Private) Ltd between 12 and 15 January 2013 be declared valid, legally binding and in full force and effect.
In his application, Wazara says the sale of shares agreement determines the rights of the parties in respect of the settlement of the dispute between AfrAsia Kindgom Bank Ltd and Valley Technologies (Private) Limited arising from the US$21 million loan facility.
Wazara also seeks an order to compel the defendents to pay his company the sum of US$150 000 a balance due to the plaintiffs under the Lalela agreement.
Lalela is a special purpose vihicls used by AfrAsia to take over Valley Technologies.
The order also seeks the immediate release of Spiritage Telecomms (Private) Limited, Connect Investments (Private) Limited and Vnet (Private) Limited from the suretyship guarantees or similar undertakings made on behalf of Valley Technologies (Private) Limited and the delivery of all documents of title originally lodged in connection therewith by Plaintiffs.
“Deliver to the Plaintiffs all security documents and title deeds released pursuant to paragraph (ii) above. Jointly and severally pay to Plaintiffs US$710,996 being the amount due in terms of clause 5.1.7 in the Lalela Agreement,” part of the summons reads.
“ln the event that the Defendants, acting jointly and severally, fail to give effect of the Sale of Shares Agreement within thirty (30) days from the date of issue of this Declarator, the sheriff be and is hereby authorized to take such steps against the defendants, jointly and severally as may be necessary to give effect to this order.”
AfrAsia Kingdom Bank entered into a debt-to-equity swap for 80% of Valley Technologies through Lalela Trading early this year after the mobile network operator failed to settle US$21 million loan obligations to the financial institution.
Wazara is on record accusing AfrAsia of blocking a Chinese investor from taking over the company, which he said would have resulted in a change of fortunes for the company.
Should the order be granted, AfrAsia Kingdom Bank would be left with a bank requiring substantially more capital at a time the institution needs to raise funds to bring its capitalisation to US$50 million.
“AfrAsia Kingdom Zimbabwe advises its shareholders that it is embarking on an exercise to raise more capital in line with the Reserve Bank of Zimbabwe regulatory requirements,” the group said in a cautionary notice to shareholders last week.
“It is likely that this process will incorporate a rights issue to existing shareholders and an offer of shares to new investors.
Cornerstone shareholder AfrAsia Holdings Ltd has committed to following their rights in any capital raising and discussion with potential new investors are already at an advanced stage.”