Minister ordered to pay back $400,000 loan

Minister ordered to pay back $400,000 loan
Published: 09 May 2018
THE High Court has ordered Labour and Social Welfare minister Petronella Kagonye to settle her $400 000 debt at CBZ Bank or risk attachment of property she surrendered as surety for the loan facility.

Kagonye, who is Zanu-PF Goromonzi South Constituency MP, acquired the loan in 2011 to finance her agricultural activities.

According to court papers, the legislator failed to service the loan, prompting the financial institution to approach the court seeking an order to compel her to pay or to have her property attached.

The litigation also included three other individuals Peter Muganyi, Lilian Muganyi and Cecilia Shingaidzo Midzi, who were cited as co-debtors after they allegedly signed and surrendered surety of their properties towards Kagonye's loan.

In his order issued recently, Justice Charles Hungwe said: "Whereupon after reading documents filed of record and hearing council it is ordered that: defendants (Kagonye, Peter, Lilian and Midzi) pay the plaintiff (CBZ) the sum of $461 842.46, interest on the above amount at the rate of 28% per annum.

"The hypothecated immovable property being a piece of land in the district of Salisbury called stand 808 Chadcombe Township of stand 562 measuring 480 square metres….is declared executable."

The judge also said "all the movable property covered in notarial general covering bond number 2645/2010 issued by the fourth defendant (Midzi) in favour of the plaintiff passed on May 12, 2010 is declared executable" adding: "all the movable property covered in notarial general covering bond number 3000/2011 passed on June 1, 2011 and 5953/2010 passed on November 17, 2010 issued by the first defendant (Kagonye) in favour of the plaintiff is declared executable".

All the cited defendants were also ordered to pay legal costs at a higher scale.

According to the court papers, on May 24, 2011, CBZ Bank and Kagonye entered into an agreement whereby the financial institution agreed to provide the politician with an overdraft facility, but as at October 2016, Kagonye and her co-debtors had an outstanding balance of $461 842,46.

The bank further said despite several demands, Kagonye and colleagues had failed and/or neglected to pay the claimed amount and as a result it approached the court for recourse.
- newsday
Tags: Debt,


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