Mahtani Sue Mutembo Nchito FOR US$4.2 m

FINANCE Bank Zambia Limited has sued Mutembo Nchito and other five for fraudulent misrepresentation in the Lusaka High Court. According to the writ of Summons obtained by the Zambianstar,, Finance Bank Zambia Limited has sued Kieran Day receiver of Mines Air Services Limited (the now defunct Zambian Airways) as First Defendant, JCN Holdings Limited second defendant while the Post Newspapers third defendants.
Mutembo and Nchima Nchito have been sued as fourth and Fifth
defendants respectively while Fred Mmembe has been sued as sixth defendant for fraudulent misrepresentation.
Finance Bank is owned by Rajan Mahtani. Finance Bank retained Messers SBN Legal Practitioners a legal firm owned by State Counsel Sunday Nkonde to handle the case, however, the legal firm has returned all the documentation on the matter as they have been finding it difficult to proceed with the case. However, the matter has taken a snag as Lawyers representing Finance Bank have found it difficult to proceed with the matter in the Lusaka High Court.
Sources close to Lawyers handling the matter told Zambianstar that Finance Bank proprietor Rajani Mahtani was not willing to give fresh instructions on whether the matter should proceed or not. “This case is being handled by State Counsel Sunday Nkonde and we know that he is finding some difficulties in proceeding with the matter because he has not received fresh instructions from Mr. Mahtani. This matter of fraudulent misrepresentation is still active in the High Courts,” said the source.
According to the writ of summon Finance Bank is demanding for the total sum of US$ 4, 208 938 being outstanding obligations due to the plaintiff from the overdraft facility on the Escrow fuel account and main overdraft account extended to the Borrower.
“The plaintiff’s claims is for recovery from the 1st defendant of US$4 208 938. 28 being outstanding obligations due to the plaintiff from the overdraft facility on the Escrow fuel account and main overdraft account extended to the Borrower by the plaintiff and from the 2nd and 3rd defendants jointly and severally being monies due to the plaintiff defendants as a result of the respective letters of guarantee for unlimited amount dated 17th October 2008 on outstanding obligations of the borrower to the plaintiff on the Escrow fuel and main overdraft account,” stated the summons.
The bank is also among other things demanding for interest for the period and any other costs as the courts may deem fit. The bank has also sued Mutembo Nchito and Nchima Nchito for fraudulent misrepresentation and is demanding for interest. Finance Bank has also sued Mutembo, Nchima and Fred Mmembe for fraudulent trading in terms of section 383 of the Companies Act, Cap 388 of the Laws of Zambia.
Mutembo, Nchima and Mmembe has also been sued for misrepresentation in terms of section 3 (1) of the Misrepresentation Act, Cap 69 of the
Laws of Zambia and Finance Bank is demanding for interest on the damages caused as the court deem fit.
And according to a statement of claim filled at the Lusaka High Court Mutembo, Nchima and Mmembe were at the material time directors of the
defunct Zambian Airways as well as JCN Holdings Limited whilst Mmembe Director of the Post Newspapers.
Mutembo, Nchima and Mmembe got an overdraft facility amounting to US$1.5m with the collateral or security to be held by the Finance Bank
which was equity funds from the Post Newspapers amounting to US$1.1 m.
The statement states that in a letter Mmembe (Post) wrote on 13 November 2007, they (Board of Directors) sought to make changes to the
application for the US$1.5m multipurpose working capital facility.

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