Businessman loses $2m equity case

HARARE - Harare businessman, Bernard Mahara Mutanga, has lost a High Court case following a botched share transfer deal involving property worth $2, 2 million.

According to court papers, the applicant Bellepaise Estate signed two agreements with Mai Kai Real Estate Development Trust in January 2006 for the sale of 10 000 shares to Mutanga’s company and certain conditions that his firm undertook to implement.

The court heard Mutanga, who was cited in court papers as the second respondent, later took Bellapaise Estate’s title deed belonging to the company’s only property, identified as number 4039/92 for Lot Block S Hatfield Estate.

He reportedly took the property’s title deed on the pretext that he wanted to process certain certificates.

Mutanga had argued in court papers that the contracts that the parties signed were still valid and accordingly enforceable.

In a recent judgment, High Court judge David Mangota, however, said that despite Mutanga’s company claiming that it paid for the shares, there was no proof of payment for the said dividends.

“If they paid for the shares, as they claimed, they would have produced a receipt, or a copy of the bank transfer for an invoice or an acknowledgment of receipt from a person who received payment as proof of what they claimed to have done,” Mangota said.

The parties, according to court papers, had disagreements on the form of currency that was to be used in the transaction.

“They (respondents) argued that the shares could not have been offered to them in foreign currency before the introduction of the multiple currency regime. It (investment agreement) also showed that the property to which the title deed related had to be revalued at the equivalent of $2 200 000, the proceeds of which would create a loan account in the applicant,” the court noted.

According to the court’s finding, Mutanga’s company did not pay the purchase price for the shares.

“There was no signed and/or certified copy of a resolution by the outgoing directors of the applicant approving the transfer of the shares to the first respondent…,” Mangota said.

He added that all annexures that were attached by Mutanga and his company in their opposing papers were devoid of meaning.

“They were more confusing than they showed anything to anyone. The applicant described them as having been a fraud,” he said.

“The applicant proved its case on the balance of probabilities. The application accordingly, succeeds with costs,” Mangota’s ruling reads.

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