David Whitehead sues Agribank

HARARE – David Whitehead Textiles (Private) Limited has filed a lawsuit against the Agricultural Bank of Zimbabwe Limited (Agribank), seeking to save its property it offered as security on behalf of a cotton company that was advanced a $5,8 million loan by the bank. 

In the application, David Whitehead Textiles (Private) Limited, which is represented by its judicial manager Knowledge Hofisi, cited Agribank, FSI Agricom Cotton (Private) Limited and the Registrar of Deeds as respondents.

According to court papers, David Whitehead entered into an agreement with Agribank and FSI Agricom Cotton (Private) Limited in March 2010 in terms of which FSI Agricom Cotton (Private) Limited was to supply cotton lint to David Whitehead, which would in turn secure credit finance from Agribank on behalf of the cotton firm.

The credit finance was to be facilitated by way of registration on a Note of Hand over David Whitehead’s stand number 1900 Gwelo Township of stand number 1882 Gwelo Township, measuring 1 6075 hectares.

The court heard that Agribank went on to advance a $5,8 million to FSI Agricom Cotton (Private) Limited.

“In breach of the agreement, second defendant (FSI Agricom Cotton (Private) Limited) only delivered to the plaintiff cotton lint worth $47 331, 83,” the court heard.

David Whitehead is now seeking an order cancelling the agreement and the withdrawal of its property which was held as security for the loan.

In its response, Agribank has denied claims that it entered into an agreement with David Whitehead for the supply of cotton lint.

“Whatever agreement entered into with second defendant (Agricom Cotton (Private) Limited) has nothing to do with first defendant (Agribank) who is not privy to any such agreement,” Agribank said.

It argued that the facility for which a Note of Hand was registered as security was when FSI Agricom Cotton (Private) Limited approached Agribank for a $5 million facility to purchase a ginnery and for working capital.

Agribank said that because of the substantial amount involved, it asked for security and the cotton firm provided David Whitehead’s title deeds.

Agribank argued that it was not privy to the agreement entered between David Whitehead and the cotton company.

It further argued that it cannot cancel the agreement it entered with FSI Agricom Cotton (Private) Limited, before the loan was fully serviced.

David Whitehead has since applied for a default judgment against FSI Agricom Cotton (Private) Limited and the registrar of deeds after the two parties failed to respond to the application on time.

The matter is still pending before the High Court.

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