Zimbabwe: Metbank Ordered to Repay NSSA U.S.$20 Million


METBANK Limited has been ordered to pay back US$20 million worth of Treasury Bills (TBs) to the National Social Security Authority (NSSA) after the High Court ruled that the bank was holding on to what does not belong to it.

TBs form part of the much-hyped NSSA forensic report which has since caused the arrest of Environment, Tourism and Hospitality Industry Minister Prisca Mupfumira on criminal abuse of office charges.

NSSA lent three bills to the bank in an agreement signed in 2017, but the latter refused to pay back arguing that there was no valid agreement between the parties.

Metbank, through its legal representative Advocate Fadzai Mahere, opposed the High Court application arguing that no agreement was ever signed and that the parties only signed a “term sheet” with a view to agreeing on the terms of security lending agreement.

However, Justice Nicholas Mathonsi, who was recently elevated to the Supreme Court, ruled that the agreement surely existed and all steps taken in the transactions point to a valid agreement and that the bank must pay back.

“The defendant (Metbank) does not own those Treasury Bills. They were lent to it for a specific purpose for a fixed period of time.

“The period expired six months after the signing of the agreement. Thereafter, the defendant would have no lawful basis for holding onto the bills. Other than chasing the mirage, that there is no agreement between the parties, the defendant did not advert to any lawful basis for the retention of the bills.

“Quite to the contrary, the argument that there exists no agreement is a self-destruct button the defendant was fervently pressing.

“It brought the entire edifice of the defendants’ case tumbling down in Humpty Dumpty fashion.

“Without the semblance of an agreement, the defendant would not have a right to keep that which it does not own. It should simply return it,” ruled Justice Mathonsi.

Advocate Tawanda Zhuwarara represented NSSA.

The judge ordered the bank top pay US$20 million plus interest.

“The defendant is hereby directed to return to the plaintiff treasury bills number Ztb109520160729A with face value of US$1 264 203 and maturity date of 29 July 2019; number Ztb 109520160908A with face value of US$6 699 060 and maturity date of 8 September 2019 as well as number Ztb 36522017503A with face value of US$12 036 736 and maturity date of 3 May 2027, whose total value is US$20 000 000.

“The defendant shall pay to the plaintiff a penalty fee of 5 percent per annum of US$20 000 000 compounded daily from 18 June 2018 to date of return of the Treasury Bills listed in paragraph one above or the date of payment of the alternative sum of US$20 million in terms of paragraph 3 below.

“In the event of the defendant’s failure to return the Treasury Bills in terms of paragraph one above, the defendant shall pay in the alternative, the sum of US$20 000 000 together with the coupon thereon at the rate of 5% per annum from 18 June 2018 to date of full payment,” reads the operative part of the judgment.

The bank will pay costs of suit on a higher scale.

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Publish date : 2019-08-06 12:36:08

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