Bank sues Bakili, Shanil for K93m
BY Frank Namangale03:24:08 - 03 February 2006
Closed down Finance Bank Malawi has sued former president Bakili Muluzi, wife Shanil and his brother Friday for failing to pay a K50 million debt that has accumulated interest and now stands at K93,597,522.82.The High Court in Blantyre on Tuesday separately granted an injunction sought by Finance Bank’s lawyers against Atupele Properties Limited and Knight Frank Malawi Limited, agents for Atupele Properties, restraining the agents from paying out the proceeds from the sale of Keza Office Park to other persons except secured creditors.But Muluzi’s lawyers Sacranie and Gow said Thursday they were not yet served with both the summons and the injunction, but said they were going to defend any litigation vigorously and vehemently, leaving no stone unturned.In the first case, court documents revealed that by various instruments in writing, the defendants guaranteed a loan granted to Atupele Properties in the sum of K50 million each, promising that they would pay singularly the debt of Atupele Properties in the sum of K50 million if the company failed to pay the debt.“Atupele Properties Limited has now failed to pay the debt and the sum has now risen to K93,597,522.82 and continues to attract interest at the Finance Bank rate until payment.“The plaintiff [Finance Bank] claims from the defendants in pursuance of the said payment of up to the sum herein claimed from anyone of them singularly until the debt is paid in full,” reads the writ of summons in part.The bank also claimed legal fees reimbursement the bank would have to pay to its lawyers Chagwamnjira & Company, calculated at 15 percent of the sum claimed plus surtax.The court commanded Muluzi, his wife and brother to either satisfy the claim or return to the court the accompanying acknowledgement of service within 14 days from the date of service, stating whether they intended to contest the proceedings or not.“If you fail to satisfy the claim or return acknowledgement within the stated time, or if you return the acknowledgement without stating therein an intention to contest the proceedings, the plaintiff may proceed with the action and judgement may be entered against you forthwith without further notice,” reads the summons, witnessed by Chief Justice Leonard Unyolo. In the other case where the court stopped Knight Frank Malawi Limited from paying out proceeds of Keza Office Park to unsecured creditors, they said either party was at liberty to apply to the court to vary, vacate or otherwise amend the order, and such application to be made within 21 days from January 30, 2006 when the order was made.“Take note that if you the defendants disobey this order, you will be guilty of the contempt and may be sent to prison or fined or your assets may be seized,” reads the order sent to Knight Frank and Muluzi himself, currently in England receiving medical attention.Muluzi, chairman of United Democratic Front and former president, is chairman and director of Atupele Properties Limited and his brother Friday is a director for Atupele Properties.Sworn affidavits for Finance Bank by their lawyers Chagwamnjira & Company state that the K50 million loan was granted against the security of Limbe East [plots] 33, 34 and 35 valued at K2 million, K13 million and K35 million respectively.The affidavits read that Muluzi failed to clear the debt and when the debt was called upon, the second defendant were Muluzi’s agents, (they) promised to clear the Finance Bank debt from proceeds of sale of some properties.But in a letter dated January 26, 2005 from Knight Frank on behalf of Atupele Properties to Finance Bank, which Chagwamnjira & Company lawyers submitted as an exhibit to the court, the agents say in order to redeem the K50 million loan, [among others] a decision was taken to sell off either in whole or part thereof the entire Atupele Properties, Churchill Road complex.“Our selling campaign commenced by marketing LE 212A as a separate entity by inviting cash offers in excess of K110 million.“Regrettably, either due to Christmas shut down period or the current adverse economic trading conditions, no definitive offers to purchase either of the two properties was received from willing and able to financially perform potential buyers,” reads the letter in part.It says offers to purchase over a term period were unilaterally rejected due to the fact that the funds were required for loan redemption. The agents said they have proceeded in January to market the entire complex as one unit, being a consolidation of all the Churchill Road properties, by inviting a reduced cash offer from K160 million to K135 million.But apparently the Finance Bank was not convinced with this letter and went ahead to sue Muluzi, wife and his brother Friday, a situation likely to depress the former president already facing other litigation, the major one being where he is being probed by Anti Corruption Bureau (ACB) for allegedly banking K1.4 billion donor money into his personal accounts.