Thu, 13 Sep 2012 04:36:07 +0000
The Nchito brothers and Fred M’membe have disputed the US $4million debt claimed by Finance Bank and have now demanded fro better particulars to enable them respond to the claim that has been logged in the Lusaka High Court.
Finance Bank is demanding $4 Million from Fred Mmembe, editor of the Post Newspaper, and Mutembio Nchito Director o Public Prosecution (DPP) and Nchima Nchito, a Lusaka Lawyer, which money the bank claims was obtained by fraudulent misrepresentation.
The matter comes up today before Judge Nigel Mutuna.
The three were directors of defunct Zambian Airways and are now being held personally liable for the money because they fraudulently, obtained the money when they knew that the company had no ability to pay back.
This is an offence under the Companies Act.
In a statement of claim before the court Finance Bank, then represented by Sunday Nkonde noted that Mutembo Nchito and Fred M’membe through false misrepresentation obtained the money knowing that there was no way that Zambian Airways would pay back.
The amount includes overdraft and interest on it.
The bank is also seeking damages against Mutembo Nchito, Nchima Nchito and Fred M’membe for fraudulent misrepresentation because the trio borrowed in spite of knowing that Zambian Airways had huge liabilities with DBZ which it was incapable of paying and which it had in fact not paid and that the trio made no effort to ensure that Zambian Airways was re-capitalised in order to become viable and payback the loan.
The claim further asserts that Fred M’membe as a defendant had no genuine belief that the Post Newspaper through whose name the money was borrowed would pay the money within two days after demand in light of the fact that the Post newspaper had huge outstanding statutory liabilities with the Zambia Revenue Authority which it had not paid.
The bank has insisted that the trio as directors should be held personally liable for the debt in terms of Section 383 of the Companies Act for fraudulent trading because they allowed Zambian airways to trade and utilise the overdraft when they knew very well or ought to have known that the company was insolvent and that there were no reasonable grounds to assume that the company would pay when obligations fell due