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Dubai company sues Zim gold producer

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A DUBAI company has filed a $25 million lawsuit against South African businessman Mzilikazi Godfrey Khumalo and his Zimbabwean gold producing firm Metallon Gold for an alleged breach of contract.

A DUBAI company has filed a $25 million lawsuit against South African businessman Mzilikazi Godfrey Khumalo and his Zimbabwean gold producing firm Metallon Gold for an alleged breach of contract.

By Everson Mushava

In papers filed at the High Court on August 4 this year under case number HC 7312/15, Tampa Gold DMCC claimed it made an advance payment of $3 million to Khumalo in anticipation of gold supplies in March last year, but he allegedly breached the agreement.

The firm, represented by its owner Shafeeq Rakkanhi Kinattinkara, is now demanding $25 million compensation for damages caused by Khumalo’s alleged failure to honour the agreement.

“In consequence of the failure to produce the gold bullion as agreed, applicant has suffered damages in the sum of $25 582 797,43 being the difference between the price at which the gold bullion would have been purchased and that at which it would have been sold,” Kinattinkara said in his founding affidavit.

According to court papers, Kinattinkara first met Khumalo in Dubai in 2013 where the businessman disclosed that he had vast gold interests in South Africa and Zimbabwe.

Kinattinkara claimed that Khumalo had assured him that he had total control over his companies in Zimbabwe and South Africa before promising to supply “250kg of gold bullion per week of 999,9 purity” to the Dubai firm.

Kinattinkara said he deposited $1 million into Khumalo’s account on March 13 2014 and another $2 million a month later on April 14 after sealing the deal.

“In accordance with our contract, I expected the first shipment of 150kg on May 23 2014. When this did not arrive, I was in constant telephonic communication with respondent’s chief executive and he assured me on numerous occasions that the delivery was imminent and I should just be patient,” Kinattinkara said.

He added that when he demanded a refund, Khumalo claimed that he was having challenges with the Zimbabwean government.

One of Khumalo’s text messages to Kinattinkara read: “I am very sorry that our agreement has become such frustrating experience. I have done and am still doing my best to complete the documentation and start delivering the gold.

“Dealing with the Zimbabwean government is frustrating in the best of times. My company also has gold assets in Congo. I am now preparing to use those assets to supply you.”