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Banker Sued in US$70 000 Deal

A HARARE businessman has sued former Trust Banking Corporation director Chris Goromonzi over a US$70 000 grain import deal that went off the rails.


Duncan Mukondiwa, a fuel importer, wants to recover US$70 000 plus interest the banker owes him since 2006 when the two partnered to import maize, fertiliser and rice from South Africa on behalf of the GMB in a deal that never took off.

High Court documents in the possession of the Zimbabwe Independent reveal that Goromonzi, representing a Botswana company, Laupa Holdings, approached Mukondiwa and entered into an agreement on February 7 2006 where the fuel importer advanced US$40 000 to the banker at an interest rate of 46% monthly.

On March 13 2006, the two signed another agreement where Mukondiwa advanced US$30 000 to Goromonzi at an interest rate of 43% monthly.

The money, according to the documents, was meant to import grain and fertiliser on behalf of the GMB and Mukondiwa was to be repaid “out of the commission proceeds from the grain transaction”.

The first transaction was to involve the importation of 50 000 tonnes of maize to be supplied to the GMB. This was to be followed by the importation of 52 000 tonnes of fertiliser and 16 000 metric tonnes of rice.
According to Mukondiwa, the transactions never materialised.

“The proposal I am working on is as follows: that you participate in the transaction under my company and outlay an amount of say US$40 000 towards the various upfront expenses,” wrote Goromonzi to Mukondiwa on February 2 2006.  “This will be subject to an agreement between you and my vehicle – Laupa Holdings Botswana – who are external principals in the transaction. Laupa will guarantee you a return – as per discussion of 46% per month and payments will be made monthly subject to timely receipt of payments in respect of the export of the commodities to Zimbabwe.”

Laupa, a company Goromonzi owned, claimed to have clinched a deal involving the export of grain from South Africa into Zimbabwe and had a signed agency commission with Mvela Agri (Pvt) Ltd & Mark Daniels (Pvt) Ltd.

As security to their agreements, Goromonzi and Mukondiwa had agreed that Laupa would cede part of its future commission in respect of work done on the grain export transaction.

“The loan shall be secured by a personal guarantee of Christopher Pasipanodya Goromonzi,” read when of the agreements.

But Mukondiwa said when the deal failed to materialise, Goromonzi only paid him back US$30 000, forcing him to approach the High Court.

Goromonzi, through his lawyers Scanlen & Holderness, in his heads of argument filed with the High Court on May 20 said the court had no jurisdiction to entertain Mukondiwa because the contracts “were neither entered into in Zimbabwe nor to be performed in Zimbabwe”.

The lawyers questioned the legality of the transaction on the basis that exchange control authority was not sought in the deal and that “an illegal agreement which has not yet been performed, either in part, will never be enforced”.

They argued that the agreement was “illegal or immoral” in that it “violated” Section 6 of the Money Lending and Rates of Interest Act.

Goromonzi’s attorneys also argued that the matter ought to have been referred to arbitration and insist that the matter was a “classical case of a vague and embarrassing” claim.

Mukondiwa’s lawyers, Kantor & Immerman, on the other hand argued that the High Court Act provides the country’s courts the jurisdiction to hear the case on the “grounds that the contracts were negotiated and entered into in Zimbabwe”.

Mukondiwa’s lawyers also argued that arbitration was not necessary because the would-be mediator, the Commercial Arbitration of South Africa, did not exist.

“Therefore, there is no process by which arbitration can be effected since there is no one to appoint arbitrator and set out the rules for such arbitration,” read Mukondiwa’s heads of argument.

Mukondiwa’s attorney also argued that the agreement was legal saying there was no “exchange control restrictions in Zimbabwe presently and that the economy is dollarised”.

“The company (Laupa) which is the principal debtor under the agreement has no assets and is a shell and was essentially the conduct through which defendant (Goromonzi) perpetrated a fraud on the plaintiff,” read the heads of argument. “On the facts, the defendant is clearly guilty of obtaining a loan under false pretences and misrepresentation. The plaintiff is taking the matter up with relevant authorities despite the fact that the defendant is using his political connections to thwart the process.” – Staff Writer.

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