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FNBS shareholders, liquidator clash over assets

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A fight has erupted between First National Building Society (FNBS) shareholders and its liquidator Winsely Militala over the return of the financial institution’s assets.

Militala who took over from the Reserve Bank of Zimbabwe-appointed liquidator David Scott on June 17 last year is accused of inappropriately disposing of FNBS’s assets.

FNBS closed indefinitely in October 2003 amid fears that the institution could collapse due to the effects of allegations of fraud and extended periods of unchecked mismanagement.

The Ministry of Finance ordered the shutdown of the building society to facilitate investigations into reports that detained FNBS managing director Samson Ruturi and his financial director Nicholas Musona allegedly defrauded the building society of nearly Z$1 billion then.

In a letter dated October 22, 2010 the High Court ordered Militala to return the financial institution’s assets although it did not specify when and their value.

The letter follows a number of correspondences between the two which the Master of the High Court said “was yielding no results”.

“Following our meeting on October 21 2010 between yourself representing the liquidator Scott, Simplicious Chihambakwe representing the directors of FNBS, Wesley Sibanda, the previous liquidator and of course myself, I directed as follows.

“That the liquidator be and is hereby directed to return to the shareholders of FNBS all assets in schedule ‘A’ or such assets not sold as of today’s date (October 21),” said Charles Nyatanga who is the master/registration /sheriff for Zimbabwe.

“The said assets be returned within seven days of this date that is by 4pm on Thursday 28 October 2010.

That the liquidator is directed to submit a final account in this liquidation by 28 October 2010 for taxation,” read the letter in part.

Nyatanga said it was recorded that all creditors in the liquidation were paid by the previous liquidator Sibanda and the other creditors.

Militala is however denying the allegations saying all that he was doing was above board and that the Master of the High Court was empowered to execute other duties but in this case there were no statute that gave him power to do so.

“I am aware that the respondent is empowered by law to take . . . of the contact of a liquidator and that he is authorised to inquire in to a liquidator’s conduct in relation to liquidations,” said Militala in his founding affidavit deposited at the High Court on January 6 2011.

“However I vehemently deny that the respondent is empowered by any statute or any other law to issue an order in nature of the one that he issued on October 21 2010,” he said.

“Applicant therefore contends that the respondent’s order is ultra vires the powers reposed in him by law and therefore ought to be set aside,” he said.

“In the circumstances, applicant prays that it may please this honourable court to grant and order in terms of the draft,” added Militala.

Militala said by a special `power of attorney executed by David John Scott he was empowered and duly authorised to depose to this affidavit on behalf of the applicant.

“The facts to which I depose herein are within my personal knowledge and are to the best of my belief true and correct,” he said.

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