(Last Updated on September 25, 2012 by Editor)
ZIMBABWE – RESERVE Bank of Zimbabwe Governor Dr Gideon Gono and his company, Lunar Chickens, have been ordered to pay Renaissance Merchant Bank US$1,2 million in settlement of a loan extended to the firm in 2010.
Gono, a director with Lunar Chickens, was cited as a coprincipal debtor and surety together with four other companies.
High Court judge Justice Chinembiri Bhunu ordered the execution of the six immovable properties that had been tendered as surety bond.
The following properties were declared executable:
Stand 3434 Harare measuring 4 694 square metres
Lot 4 of GA Hellensvale measuring 2, 0332 hectares
Stand 6 Tara, Goromonzi measuring 6, 3314 hectares
Stand 644 Ruwa measuring 2 000 square metres.
Justice Bhunu granted the order following an unopposed chamber application by RMB’s lawyers, Danzinger and Partners.
“Judgment is hereby entered against the defendants jointly and severally the one paying the others to be absolved in the sum of US$1 274 167,85 together with interest at the rate of 21 percent per annum from May 1 2012 to date of payment in full . . . ” read part of the order.
The other four companies that were cited as defendants together with Dr Gono and Lunar Chickens are Froglett Investments, Kimira Bonsai Nursery, Hanrob Investments and Wykeham Investments.Facts of the matter are that on December 8 2010, RMB extended a credit facility of US$1 million to Lunar Chickens.
In the same deal, Dr Gono and the other four firms stood as surety and coprincipal debtors for the due fulfillment of all the obligations of Lunar Chickens.
Froglett passed a surety bond of Stand Number 3434 Harare Township in favour of RMB while Kimira Bonsai Nursery bonded the Hellensvale property.
Hanrob Investments offered Stand Number 6 Tara Township while Wykeham bonded Stand 644 Ruwa.
In breach of the agreement, Lunar Chickens has failed to settle the loan under the credit facility that expired on May 31, 2011.
The balance outstanding on the loan stood at US$1 274 167,85 as at April 2012. The capital amount is US$998 996,03 and interest by April this year was calculated at US$275 161,82. Bank charges were only US$10.
Despite demand, the six defendants have refused to settle the said amount, prompting RMB to file summons at the High Court on June 1 this year.
The summons was duly served on the defendants on June 13 this year and the deputy sheriff produced a return of service document that was filed at the High Court. Lunar Chickens, Dr Gono and the four other firms did not respond to the claim until they were automatically barred in terms of the rules of the High Court.
RMB then filed a chamber application seeking a default judgment in terms of the summons issued.
Justice Bhunu granted the chamber application last Wednesday. RMB is on record claiming that Lunar Chickens owed it US$1 million while the central bank itself owes it US$8 million.
In another claim at the High Court, RMB indicated that if it got back the US$9 million owed by the two entities, its financial woes would end.