AfrAsia battles $16m lawsuits

Published: 07 June 2015
Troubled AfrAsia Zimbabwe Holdings Limited (AZHL)'s banking and microfinance subsidiaries are contesting $16,4 million lawsuits from various clients.

Among the aggrieved is Alphavic Management Consultancy (Private) Limited which is suing the group's flagship unit AfrAsia Bank Zimbabwe Limited (ABZL) for $15,3 million in damages for alleged financial prejudice suffered when it failed to access funding under a PTA Bank line of credit.

"Client alleges that it negotiated for a $10 million line of credit with PTA and that the bank failed to avail funding to it. The bank is opposing the claim," said AZHL in its financials for the year to June 2014.

Summons have also been issued against ABZL and its two former employees by the Local Authority Pension Fund (LAPF) for the sum of $926 392 alleged to have been fraudulently withdrawn from their account.

AZHL noted that events giving rise to the claim are such that LAPF assistant accountants would open bank accounts at AfrAsia Bank's Mutare branch in the name of bona fide pensioners supposedly due to receive their pensions.

"Once the money was transferred through RTGS from LAPF's account into the bank accounts, it was quickly withdrawn resulting in loss to LAPF," said AZHL.

The group was, therefore, denying liability as frauds were actually perpetrated at LAPF and from the independent legal opinion sort, the bank had good prospects of successfully defending the matter.

The group's micro-finance unit, MicroKing Finance Private Limited (MicroKing) is also being sued by Cris Davis Marketing Limited for damages amounting to $200 000 for alleged lost business emanating from a title deed belonging to the client that got lost while in MicroKing's custody.

However, AZHL said they are opposing the claims.

The latest claims come after businessman Zach Wazara's collapsed Spiritage last year instituted legal proceedings against ABZL claiming $78 million for damages for alleged loss in value of its subsidiary Valley Technologies (Valley Tech).

The claim emanates from alleged failure by the bank and its directors to observe alleged fiduciary duties owed to Valley Tech.

Meanwhile, in the period under review, the group posted a loss of $9 million compared to a loss of $16 million for the 18 months ended June 2013.

The loss included a revaluation loss on the investment in FDH Malawi amounting to $4,5 million.

Net interest income slumped to $12,4 million from $26 million in prior comparable period while fees and commission income also declined to $11,4 million from $25,6 million.
- dailynews
Tags: AfrAsia,


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