By Staff Reporter
THE fight between shareholders of Access Finance Group has escalated on the issue of sale of shares with the other party vying for arbitration while the other is opting for a court process.
A High Court application shows that Access Finance wants arbitration and not court action to settle outstanding issues.
The company is also dragging its feet over transferring the properties or paying in full former shareholder and managing director Senziwani Sikhosana as conveyance cannot be completed without title deeds.
Access Finance bosses are raising a series of technicalities among them jurisdiction, locus standi and incompetent relief – to avoid their obligations and stall the process.
Part of the problem is that the title deeds to the properties involved in the share sale transaction are not yet available.
Value Added Tax (VAT) – 15% of the value of at least US$3.9 million real estate development, a significant amount – has not been paid to the Zimbabwe Revenue Authority (Zimra), which is a major stumbling block.
The transfer of land which has already been developed by a registered property developer is subject to 15% VAT which means Access Finance owes Zimra at least US$585 000.
The figure may go up to way more than US$600 000 as the value of the property development is estimated between US$3.9 million and US$4.4 million.
Mountbatten Complex was developed and is owned by Access Finance shareholders.
So the sale of the shares transaction is now deeply encumbered by the Zimra tax issue.
Sikhosana, former Access Finance shareholder and managing director, and his business entities have taken ex-chief executive Singathini Raymond Chigogwana and associated companies to court over title deeds of townhouses worth US$320 000.
The two former business partners, who have had a bruising shareholding battle, are currently fighting over a real estate development – No. 36 Mountbatten Complex – in Marlborough, Harare, which has 37 townhouse units valued at least US$3.9 million.
Three of those properties are subject to the court case.
Chigogwana and Sikhosana were business partners running several companies, Access Forex (Pvt) Ltd, Access Finance (Pvt) Ltd, Tara Capital (Pvt) Ltd, Thirty-Six Mountbatten (Pvt) Ltd as well as Access Forex SA (Pty) Ltd, until a nasty fight broke out over shareholding last year, leading to the court action.
The applicants in the High Court case HC1007/23 over properties are Sikhosana and his entities Ferden Investments, Rock Drill Mining and Seanmart Investments, while the respondents are Chigogwana, Bwerinofa, Thirty-Six Mountbatten, Access Finance, Access Forex, Tara Capital, The Sheriff of the High Court and the Registrar of Deeds and Companies.
Court papers show that Sikhosana wants Chigogwana to transfer the properties which were part of their bitter separation settlement in real estate or cash form.
He also wants the court to issue an order to attach of his former partner’s assets if this is not done.
Chigogwana also wants his erstwhile colleague to pay all transfer taxes, imposts and costs associated with the deal.
Sikhosana says in terms of Clause 9 of the agreement of sale of his shares and property as well as the Share Purchase Agreement (SPA), he should put Chigogwana in mora (default) to address the issue within 14 days. If the breach is not rectified, he shall have a right to cancel the agreement or demand redress in casu (during the case).
As chief executive, Chigogwana owned 56% shareholding, Sikhosana, who was managing director, 20% and their chairman Isau Bwerinofa 24%.
However, Bwerinofa has launched a pushback in court against Sikhosana in his opposing or answering affidavit, saying since there is now a dispute in terms of the agreement SPA the matter should go to arbitration, not to court.
Bwerinofa raised a number of issues against Sikhosana, including jurisdiction, locus standi, incompetent relief, fulfillment of terms of the agreement and arbitration.
Bwerinofa said Access Finance is not able to give Sikhosana his title deeds because they are not there since VAT has not yet been paid.
On cash payment, he wants that matter to go to arbitration.
In his answering affidavit, Bwerinofa also raised several points in limine or preliminary issues, mainly legal technicalities.
Bwerinofa argued the court has no jurisdiction to hear Sikhosana’s application.
“I am advised, by my legal practitioners, which advice I accept, that this honourable court does not have jurisdiction to deal with this matter.
“Clause 21.1 of the Share Purchase Agreement (hereinafter referred to as ‘the SPA’) provides that any dispute out of or in connection with the interpretation, the effect or the implementation of, the existence, validity or termination of, or any other matter arising directly or indirectly out of this agreement shall be referred to and finally resolved by arbitration in terms of this clause,” he added.
Bwerinofa also says Sikhosana is seeking an order which the court cannot issue, hence an incompetent relief.
“The applicants allege that the claim for specific performance and. alternatively, damages is founded on the respective sale agreements. The individual sale agreements were entered between the 2nd-4th applicants (Ferden Investments, Rock Drill Mining and Seanmart Investments) and the Third respondent (Thirty-Six Mountbatten).
“The First (Chigogwana), Second (Bwerinofa), Fourth, Fifth and Sixth respondents (Access Finance, Access Forex, Tara Capital respectively) herein are not privy to the individual sale agreements purportedly relied upon by the applicants. I am advised by my legal practitioners, which advice I accept, that contractual remedies are enforceable only by or against parties to a contract and not third parties since contracts only create personal rights.”
On locus standi Bwerinofa said Sikhosana has no right or capacity to bring the application and to be before the court.
Bwerinofa argued that the matter must go to arbitration and be settled there, not in court.
The matter is yet to be heard.