Former industry deputy minister Phineas Chihota on Friday, escaped the wrath of creditors, after two local banks reversed a scheduled auction of two properties belonging to the beleaguered politician which were attached nearly three months ago over unsettled debts estimated at more than $0,5million.
The properties include Wallace Laboratories, industrial complex on Number 4 Plymouth Road in Southerton, Harare, and a residential house on Number 56 Malvern Road, Waterfalls, Harare.
Apparently these properties were the main attraction among eight immovable properties which the High Court deputy sheriff has ordered for auction. Several bidders left the auction floor soon after auctioneers, GMP Real Estate, broke the news.
Through their lawyers, the creditors — ZB Bank and Infrastructure Development Bank Zimbabwe (IDBZ) wrote to the auctioneers informing them the disposal sale had been cancelled.
“The banks gave us the instruction to cancel the auction of the properties but we don’t know the kind of arrangement they have entered into,” said Ostern Mutero of Sawyer and Mkushi, the legal firm representing the banks.
Neither ZB Bank nor IDBZ were prepared to comment on the matter and referred NewsDay to several officials, none of whom explained whether the institutions had struck an out-of court deal with Chihota.
The latter two would not comment. GMP Real Estate had put the properties on auction in Harare for last Friday, in terms of a High Court order obtained by the two creditors in August.
ZB Bank in August obtained a High Court order to attach Wallace Laboratories, after the company failed to honour payment demands filed through the same court.
The deeds to the property — which comprises a factory, three warehouses, a research block and double-storey office block — had already been transferred to the lender. The factory manufactures household and personal care products.
Records say 20 more creditors have also made additional claims to Wallace Laboratories for debts in excess of $1 million.
IDBZ also obtained a High Court order to hold title to Chihota’s residential property on number 56 Malvern Road, Waterfalls — a walled and gated single-storey house built on 4004 square metres of land comprising three bedrooms, a lounge, dining room, kitchen and single garage.
The property had been converted into a crèche.