Equity Properties has roped in the Reserve Bank of Zimbabwe (RBZ) to mediate in its dispute with a company owned by Indian business tycoon Jayesh Shah, which is holding onto a title deed to an upmarket housing project.
BY NDAMU SANDU
The property concern is fighting Shah’s Al Shams Global BVI to recover the title deed for its Golden CT, an upmarket housing project.
Equity had used the title deed, Deed Transfer number 9068/08, as collateral to access a $1,6 million credit facility from Interfin Bank, which is currently under liquidation.
It repaid the loan last year, but Interfin’s liquidator has failed to return the title deed despite promises to do so within days after the repayment.
In a letter dated November 17, 2017 to Al Shams, Equity said it was giving mediation a chance because an “out-of-court settlement is a faster method of resolving such disputes”.
It said the out-of-court settlement minimised further damages to Equity and also reduced collateral damage to depositors of Interfin Bank, who have not been paid for more than a year after Equity repaid the credit facility and are “facing the real risk that the money will be eroded by inflation the longer they wait to be paid”.
Equity said more than 300 clients who bought residential stands cannot get title as the title deed was being held by Al Shams and had suffered damages of more than $10 million after failing to “carry out our housing development programme, transfer title deeds to our stand purchasers and use the title deed to raise money to pay off our creditors”.
Equity said Al Shams took the title deed from Interfin “unlawfully with questionable assistance from RBZ during the time of Gideon Gono as governor” and was illegally holding such a title deed.
The property concern accused Al Shams of taking its Bankers Acceptances on March 26, 2012 from Interfin “under the watchful eye of the RBZ at that time”.
Equity said central banks use the principle of moral suasion to resolve certain disputes that are likely to inconvenience and damage innocent members of the public, including, in this case, depositors of Interfin Bank and purchasers of stands in its housing project.
It said central banks intervene if disputes create systemic risk on the banking sector given that “there are banks that lend money to our stand purchasers and, hence, are exposed”.
Equity said central banks intervene if such disputes undermine the confidence in banks given that what Al Shams was allowed to do by “RBZ and the curator at the time is not consistent with normal banking practices”.
Equity was granted a court order to sue Al Shams for damages of at least $10 million and in September attached the $25 million asset ceded to Al Shams by Interfin.
“Thus, the more you delay the return of our title deed, the more you delay your own access to the $25 million which you are claiming from Interfin Bank given our court order of attachment of the mentioned $25 million,” it said.
The property concern questioned Al Shams’ past relationship with RBZ after Shah wrote to RBZ on September 20, 2012 requesting the bank to prevail on the curator to accept Al Shams’ claim of $25 439 015,66.
Equity said this was “undue influence on RBZ, which resulted in Al Shams being given undue preference as a creditor on the assets of a bank that was already under a curator and the undue preference was at the expense of the other depositors of Interfin”.
In preparation for mediation, Equity wants answers to Al Shams’ nature of relationship with RBZ during Gono’s tenure, what it had agreed with RBZ on Equity’s title deed, whether it sold vehicles to the bank or any assets and whether there was a public tender to that effect.
Shah had not yet responded to questions by NewsDay at the time of going to print last night.