The legal fight between global financier Al Shams Global BV1 Limited and Equity Properties (Pvt) Ltd over title deeds to a piece of land belonging to the latter, has brought to fore challenges local companies face if certain business laws are not aligned to the Constitution.
Al Shams Global is a peregrine entity embroiled in title deeds dispute with Equity Properties.
Under peregrinus law, a local company cannot sue a foreign entity without approval from the court, but a foreign company can sue the local company without seeking leave from the courts.
An Equity Properties official Mr Takunda Gonese told The Herald Business that the current legal status creates disparity in legal contestations as Equity Properties cannot sue the global financier to get back its title deeds held by Al Shams Global.
“Such has been the prejudice that many businesses have suffered at the hands of Al Shams Global BV1 Limited that hides behind the status of being a foreign entity (peregrinus laws),” he said.
“Therefore, local firms cannot sue for what is rightfully theirs. Local business continues to be at risk if such draconian laws are not aligned to the Constitution of Zimbabwe, which guarantees the right to equality before the law.”
The property dispute arose after Equity Properties offered its Lot 3 of Bannockburn land to Interfin as collateral to enable it to get a $2,2 million loan from Interfin. Interfin closed in June 2012 due to a liquidity crunch.
The property company had sold more than 300 stands at Lot 3 of Bannockburn to home-seekers, which land was encumbered by the loan. Al Shams Global acquired a stake in Interfin through a loan it had advanced to the bank.
Al Shams Global then seized Equity Properties’ title deeds and Bankers Acceptances unlawfully from Interfin, it is alleged, during the time the bank’s assets were being liquidated to pay creditors.
Mr Gonese said the liquidation report to the first creditors meeting, revealed that Al Sham Global was owed $3 million by Interfin Bank.
This, he said, was secured by 36 percent shareholding in Interfin Financial Services, a holding company for Interfin Bank in direct breach of Section 26 of the Banking Act and without the Reserve Bank of Zimbabwe’s approval of such shareholding.
“Consequently, Al Shams Global was an unlawful shareholder who wielded power over Interfin Bank,” he said.
“In the absence of a board of resolution and specific agreement with Interfin Bank, to which they agreed to handover specific rights including the right to our title deeds, Al Shams Global’s action constitute undue preference to creditor which is unlawful.”
Mr Gonese said it became apparent that Al Shams Global had underhand dealings with Interfin Bank during curatorship and continued to seek to wield its power in the liquidated institution by attempting to hold the Equity Properties’ title deed unlawfully.
The High Court last week quashed a court ruling forcing the businessman to surrender to the property company, title deeds to land earmarked for residential properties. The same court had granted Equity Properties a default judgment for leave to serve summons and a declaration in respect of its claims for vindication of its property and delictual damages against Al Shams Global.
But Justice Isaac Mzenda overturned the judgment in favour of Al Shams Global on the grounds that the default judgment was granted in error.
“The order granted by this court on 6 June 2018 in case Number HC 2463 /18 be and is hereby rescinded as it was granted in error,” ruled Justice Mzenda.
But Mr Gonese said the rescission of the judgment by Justice Muzenda did not give Al Shams Global BV1 Limited victory, but simply meant that the main matter which is an application for vindication will proceed on merits.
He accused Mr Shah of claiming the same money, which he said they repaid to Interfin Bank and as such his claim was an unlawful double dipping of the same loan. No comment could be obtained from Al Shams Global yesterday.