Court overturns dodgy takeover of company

High Court judge Justice Nicholas Mathonsi has returned Norwich Trading (Pvt) Ltd to its original owner, Nighert Parween Savania, after she successfully challenged the fraudulent manner her company was taken over by Harare businessman Nathan Mnaba.

BY CHARLES LAITON

The judge also ordered Mnaba to vacate stand 750 Greystone Park and pay holding over damages of $1 000 per month from October 10, 2011 to date of eviction together with interest.

In his judgment delivered on November 7, Justice Mathonsi described Mnaba as a “dishonest person and demonstrably unreliable witness who prevaricated a lot and even contradicted his own pleadings” while making an attempt to cling to the company despite his breach of an agreement of sale between the parties.

According to evidence adduced in court, Savania sold the company to Mnaba in 2011 for $380 000, with the consent of her children soon after the death of her husband in 2010.

The court heard, Mnaba then made a part payment of $250 000, leaving a balance of $130 000, which he later failed to pay, but went on to fraudulently process a CR14 document, removing Savania from the directorship of the company.

However, when Savania noticed Mnaba had failed to pay the balance, she cancelled the agreement of sale and applied for Mnaba’s eviction.

But she realised the company documents had been tampered with, resulting in a protracted legal battle for control of the company.

In his judgment, however, Justice Mathonsi said: “Clearly, there are contradictions in the defendant’s (Mnaba) pleadings. In the original plea, he accepted the validity of the written sale agreement relied upon by the plaintiffs (Savania and the company) in instituting this action. He admitted breaching it, but sought to blame the breach on the plaintiffs for setting up a competitive business venture.

“… the defendant (Mnaba) was a dishonest person and demonstrably unreliable witness who prevaricated a lot and even contradicted his own pleadings. I, therefore, completely reject his evidence that there was another agreement … in the process of fabrication it was lost to the defendant that even that oral agreement would not assist his situation at all…”

Justice Mathonsi also said the purported sale of Norwich Trading was a nullity, although the Master of the High Court had consented to the transaction because the sale was not conducted through a private auction in terms of section 120 of the Administration of Estate Act.

“Having found that the purported sale was a nullity, it must follow that he (Mnaba) never became a member of the company and never acquired rights of any form in it. He could, therefore, not act to remove directors, or convene meetings or appoint directors of the company. He was in borrowed robes when he purported to do so and engaging in an exercise in futility,” the judge said.

“… Now that the sale agreement has been found to have been invalid, the status quo ante (the way things were before) must be restored … In any event, the defendant is holding onto property belonging to a deceased’s estate …”

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