TIMOTHY Chiganze’s long stint as Interfin Bank chairman ended nastily, with the now defunct bank demanding the businessman repay $1,1 million in outstanding loans to the institution as at December 2014.
BY TAURAI MANGUDHLA
Information gathered by NewsDay suggests Chiganze was expected to appear for a pre-trial conference last Friday.
Chiganze and his wife, Barbra, are second and third respondents in the High Court case and directors of Bartim Lake Nurseries — which is the first respondent. Another company, Tarubinga Investments (Private) Limited is cited as the fourth defendant.
While court documents in our possession show that Chiganze’s Bartim Lake Nurseries was given a loan of $1 168 280,31 under a multipurpose facility comprising revolving acceptance credits, overdraft guarantees and call or forex loans as agreed between the two parties.
Interfin Bank charged interest of $1 337 336,03 total interest on the facility and bank charges of $14 838,79 producing a total repayable of $2 351 399,41.
“First defendant defaulted on making due and punctual repayment under the agreement and has only paid $1 412 882,81 towards liquidation of the debt and the total sum outstanding amount under agreement is $1 107 572,31,” read part of the court documents.
Of the amount due to Interfin Bank, $983 149,19 is capital and the sum of $124 432,12 is interest.
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According to the loan agreement, interest on cash advances was to float at 3% above Interfin Banks’s minimum lending rate and would be calculated on the daily balance outstanding to the debit of Bartim Lake Nurseries’ overdraft.
“However, in the event of first defendant defaulting on making due punctual payment of any outstanding amount in excess of the agreed facility limit or subsequent to the expiry or withdrawal of the facility, penalty interest was to accrue at the rate of 10% over and above the rate of interest applicable to the cash advance,” read the court papers.
According to the agreement, interest remaining unpaid on the due date is added to the capital amount and earns further interest as if it was part of the capital amount. Any repayments made would be first appropriated towards interest and the residue towards capital. Defendants were also liable to reimburse the plaintiff for any legal costs accrued in trying to collect payments.
“Second, third and fourth defendants bound themselves jointly and severally as sureties and co-principal debtors with first defendant for payment of any and all monies due to plaintiff by first defendant. It was a term of the agreement that all amounts outstanding were repayable on or before the expiry of the facility. The facility expired on December 31, 2011,” read the court documents.
Interfin Bank went under due to toxic insider and related party loans. As at December 2014, the bank collected a measly 1,57% of the $107,2 million owed by debtors since it was put under recuperative curatorship by the central bank in June 2012 before being put under liquidation in 2015.
