Thu, 14 Feb 2013 14:37:20 +0000
Development Bank of Zambia (DBZ) has asked the Supreme Court to uphold the High Court ruling that demanded for the defunct Zambian Airways shareholders DPP Mutembo Nchito, his brother Nchima and Post Newspapers owner Fred M’membe to pay back the K14 billion they owe the bank with costs.
This was in an appeal hearing in which the three directors are contesting the High Court judgment that found them culpable of obtaining K14 billion from the DBZ by fraudulent misrepresentation.
DBZ lawyer Buta Gondwe said that all the parties in the matter were fully aware of the conditions attached to the loan and should therefore honour the contract which they signed.
“It’s our submission therefore that the judgment that was passed by High Court Judge Nigel Mutuna was in order and that the undertakings in so far as it stood be enforced without any conditions attached,” Mr. Gondwe said.
He said it was clearly stated in the contract that the borrower’s debt would be converted into equity and that the appellant did agree to the terms of the facility with their signatures.
Mr. Gondwe was responding to submissions by the DDP Mutembo Nchito whose arguments were based on the known operational problems the airline had encountered to its collapse which should shield the shareholders from settling the K14 billion debt with DBZ.
Mr. Gondwe said there was no need of raising the issue of shareholder rights agreement which was not in effect during the contract signing, adding that “it would not be right to now to raise the issue that there were shareholders rights agreement and argue that there were no shares that had been taken”.
He said it was tried law that when as agreement was sealed, there was no need for consideration.And Mutembo Nchito earlier wondered which records Judge Mutuna got the information from that lead to attack Zambian Airways in his findings.
Mr. Mutembo Nchito who expressed shock at the DBZ interest to uphold the judgment said he did not expect an immediate decision from the Supreme Court over because the Judgment was made without substance.
“It became clear that we where in the same boat on the issue of security. There was a realization that security was not worth much,” he said. The DPP Nchito told the Supreme Court that the High Court Judgment gave the impression that the appellants did something fraudulent which implicated them in the findings, which he said was what was worrying about the case.
“Am puzzled by the submission that this court should find the judgment ok, that judgment I believe can not be made by this Court today, because the judgment made was insubstantial,” Mutembo said.
He explained that what were supposed to be bought back was the shares, and not the debt.
But Mr. Gondwe explained that the buy back required ‘yes’ that there was to be a shareholders agreement but that in lieu there0f that was to be undertaken by the shareholders to repay the facility to the respondents and converted into shares in the event as expected, the Judge below was on firm ground in finding as he did in findings in the earlier Judgment.