A HARARE property development company has filed a High Court application against controversial business tycoon Jayesh Shah and his firm Al Shams Global seeking the return of 12 Bills of Exchange valued at $2 million that he allegedly took without authority.
Equity Properties took Shah and his firm to court, arguing that he was illegally in possession of the Bills of Exchange, which were in the custody of the Interfin Bank. Interfin was placed under curatorship early this year.
A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed future time a certain amount of money.
The property company was granted a $1,6 million overdraft by Interfin in May 2011, but later approached the bank for additional $2 million working capital for its massive $20 million housing project in Harare.
The $2 million was reportedly financed by Shah’s company through Interfin, but the money was not accessed by Equity Properties for working capital as agreed on the bills. Interfin handed over Equity’s Bills of Exchange valued $2 million to Shah.
According to the application filed on October 31, Equity, through its senior manager Kumbirai Matimba, are seeking an order that Shah and Al Shams, “Desist from claiming to be holders or holders of value or holders in due course or bearers of exchange issued by the applicant on March 26 2012.
“Desist from seeking to negotiate or use or in any way obtain value for the said Bills of Exchange. Return to the applicant such of the said Bills as are in their possession”.
Equity argued that in March this year the bills were drawn and accepted by Interfin, but were not endorsed, hence remained payable to them.
The company said on October 16, it was approached by the respondents demanding payment under the bills on the basis that they were party to the bills after having provided value to them.
“The respondents are not the payees or endorsee of the bills in question . . . as the respondents are neither payees nor endorses of the Bills in question they cannot be a holder or holder of value or holder in due course.
“The respondents are therefore holding the bills without the right to do so.
“The applicant as the payee is entitled to the return of the Bills,” reads part of the application.
While admitting its indebtedness to Interfin in the form of an overdraft, Equitiy denied having any liability to Interfin or Shah and Al Shams in respect of the bills.
The company argued that any funds received by Interfin from Shah in relation to the bills were for Interfin’s benefit and were not made available to Equity as working capital.
Shah is yet to respond to the lawsuit, although NewsDay is reliably informed that Equity Properties were ready to settle with Interfin on the overdraft only.