THE winding down of the defunct Interfin Bank (pictured) is facing new hurdles amid revelations a local property firm is suing the bank’s liquidator and prominent lender Jayesh Shah who is holding onto title deeds of the plush Golden CT housing project, it has been established.
By Bernard Mpofu
Equity Properties has slapped Shah with an US$11 million lawsuit and wants the Deposit Protection Corporation (DPC) chief executive officer John Chikura to face criminal charges over how he handled a settlement between Interfin and the property firm.
In a letter dated October 20 to the Master of the High Court, the Chris Tande-founded Equity argued that Chikura, the liquidator of Interfin Bank, is out to deny the company the right to challenge the liquidation. He said the liquidation would also prejudice Interfin depositors and potential homeowners who bought residential stands from Equity.
According to correspondence seen by the Zimbabwe Independent, Equity surrendered its title deeds to Interfin in exchange for a US$1,6 million facility from the bank which doubled due interests. The company initially defaulted on the facility and eventually settled for an agreement in which it would pay off Interfin and retain title deeds 10 days after settlement. But after paying off its debt the company established that Interfin had surrendered title deeds to a company owned by Shah which was one of Interfin’s creditors.
“The liquidator is refusing to release our deed of transfer (title deed) and is also preventing purchasers of our stands from getting their title deeds. The liquidator is also denying depositors of Interfin Bank their money using unacceptable reasons,” reads the letter in part. “The liquidator misrepresented to us and prejudiced us more than US$11 million from the liquidator when we fully repaid our loan to Interfin Bank hence we are claiming damages of US$11 million from the liquidator. Instead of addressing this problem adequately including through amicable dialogue the liquidator became uncooperative and as a result we reported the liquidator’s representative including its agent to the police under case HRE CENT CR: 1591/4/16 at Harare Central Police Station.”
Incumbent central bank chief John Mangudya, according to the letter, settled the debt which the bank indirectly owed Equity and, in turn, the property firm used these funds to enter into an agreement to pay off Interfin. Equity, according to the letter, paid off Interfin using Treasury Bills on February 23, 2016.
“Equity Properties was prevented by factors beyond its control to settle such debt on time. Notably, during the time of Dr Gideon Gono as governor of the Reserve Bank of Zimbabwe, Equity Properties was owed money indirectly by RBZ through Time Bank of Zimbabwe Limited, and the RBZ was not paying such money.
“Thus Equity Properties’ failure to perform under the loan agreement with Interfin Bank was due to supervening impossibility of performance arising from the indirect debt owed by RBZ to Equity Properties arising from the indirect debt owed by RBZ to Equity Properties and Interfin Bank was aware of the situation before appointment of the curator.
“The liquidator is not disclosing fully his relationship with Al Shams Global (a company owned by Shah) and the full details of the transaction between Al Shams Global and Interfin Bank including contra accounting entries and the legal documents that were used to transfer our title deed to Al Shams Global. For example, he has allowed Al Shams Global to sue him over frivolous cases, but he is not suing Al Shams Global over the title deed that Al Shams is holding unlawfully,” the letter further reads.
Equity says that the release of title deeds to Shah was unlawful, adding that blocking Interfin’s liquidation was a way of seeking redress.
“When Equity pressed DPC for release of the deed of transfer, DPC then indicated that Interfin had purportedly released the mortgage bond and our deed of transfer to Al Shams Global. However, the mortgage bond which was purportedly ceded to Al Shams Global was cancelled by the courts under case number HC 3987/13.”