Shah meets his match

HARARE - A local property firm Equity Properties (Private) Limited (Equity) has filed a lawsuit against controversial businessperson Jayesh Shah for attempts to directly extract money from it over bills of exchange issued through Interfin Banking Corporation Limited (Interfin).

The end-October suit also comes as the Indian tycoon has sued Savannah Tobacco (Savannah) and Interfin in an unrelated dispute, but similarly-structured $2,8 million parcel of bills.

In its key argument to the High Court, Equity says Shah and his Dubai-based Al Shams Global (Private) Limited (Al Shams) are claiming to be the bonafide owners or holders of the financial instruments when they were not endorsed.

At any rate, the Harare property developer has not received money — whether provided by the self-styled financier or any other party —from Interfin, it added.

“In other words, the respondents (Shah and Al Shams) are claiming to be holders or holders of value or holders in due course” Kumbirai Matimba, the company’s senior manager says in his application, adding they were holding the bills unlawfully.

“The Bills were not endorsed by the applicant (Equity) and applicant did not receive value under the Bills,” he said.

On the other hand, the self-made millionaire — owed nearly $30 million by closed Interfin — claims he is entitled to a repayment by virtue of having provided liquidity to the Interfin bills, a claim also punted in the Savannah case.

While Shah has felled many Zimbabwean businesspersons through litigation, it seems he has met his match in Equity, which is contesting his mid-October demands on legal and procedural grounds since the bills are unendorsed.

In the circumstances, Equity is also seeking an order to him and Al Shams from seeking to negotiate or use — in any way — to obtain value from the commercial paper.

Although Matimba’s company is indebted to Interfin under a March 2011 overdraft facility, it denies owing the institution under the 12-bill arrangement, thus prompting the company to sue Interfin for payment for one of the matured bills with a value of $200 000.

“… at all times it was agreed between the applicant and the respondent that the purpose of the Bills was to provide working capital for the applicant,” it said in the Interfin case, adding the instruments were a separate and distinct obligation, which did not arise from the 18-month credit facility.

“There was no instruction from Applicant to the respondent to use the Bills to repay the overdraft.”

While equity presented the bill in question for payment on October 24 this year, it was not honoured, thus prompting the suit.

In its court papers, Equity has not only refused to recognise the bills and repayment of the $200 000 plus interest, but also wants the stricken bank to return the remaining 11 instruments. - Eric Chiriga

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