THE High Court has ordered the sale of Caps Holdings (Ltd) head office through a private treaty nearly two months after an initial disposal of the property was reversed following a $1,5 million bid by Chinese investors.
The development could be a new twist to the case after the group’s chairman Frederick Mtandah promised to repay funds owed to creditors and reclaim control of the property.
Caps Holdings owes CBZ Bank $6,5 million. According to a newspaper advertisement carried yesterday, the Sheriff of the High Court on Monday instructed StoHill Properties, a local real estate firm, to invite offers for the sale.
Responding to questions sent by this paper, CBZ Bank managing director Peter Zimunya said the bank was expecting to recover its funds after the sale by private treaty.
In August, CBZ Holdings group chief executive officer John Mangudya told NewsDay Business that the sale of the property was overturned despite a $1,5 million bid.
He said Chinese investors had shown interest in the asset during the auction, but the sale had to be put on hold in line with a government directive.
Mtandah said the group did not owe the bank anything apart from the interest which had accumulated from last year.
Mtandah said the reason why the bank wanted to auction the property was because of the interest and the company had since repaid the first loan of $533 000 which was due on June 1, 2012 and the other one of $420 000 which was due October 1.
“We are saying we don’t owe the bank money, but the bank has been charging us interest from last year to date which is not more than $600 000,” Mtandah said.
“We are not liable as we were stopped from clearing the debt by the former manager. We have paid all the two loans and what has remained are the interest charges.”
Early this year, Mtandah described earlier attempts to auction the property as illegal, saying he had agreed on a repayment plan with CBZ and FBC Bank, which Caps owes in excess of $4 million.
He also argued that government, through Natpharm, had undertaken to settle funds owed to Caps, which would in turn help the company pay its creditors. In June, the Caps Holdings boss said last year Cabinet made a decision to take over the company’s debts as a way of rescuing the erstwhile pharmaceutical giant.