Mon 22 Feb 2010
Seed Co International Limited is suing the embattled Reserve Bank of Zimbabwe over a US$3,6 million debt after the latter allegedly failed to pay for seed it ordered from the firm’s Botswana branch during the 2007 and 2008 farming seasons.
The firm issued summons in November last year and the bank never responded prompting Seed Co to apply for a default judgment at the High Court.
Justice Charles Hungwe is expected to make a ruling on the chamber application soon.
Atherstone and Cook Legal Practitioners are appearing for Seed Co while Chitapi and Associates are representing the central bank.
In the application, Seed Co submitted: “Defendant was served with a copy of summons on November 2 2009. Although they entered an appearance to defend on November 5, defendant has failed to plead. The defendant has lost right to defend the matter.”
According to the summons, during the 2007 and 2008 farming seasons, the RBZ ordered maize seed from Seed Co International’s Botswana depot.
In 2007, seed valued at US$6 376 350 was delivered to RBZ from Botswana and early 2008 another consignment of seed worth US$6 999 654 25 came in.
RBZ, according to the papers, had paid US$10 million by April 2008, leaving a balance of US$3 634 830 80.
It is Seed Co’s claim that the RBZ undertook to pay the balance in weekly installments of US$400 000 with effect from May 2008.
Seed Co said the payment plan was never fulfilled, prompting the firm to seek the High Court’s intervention to recover the money.
Meanwhile, The Registrar General (RG) Tobaiwa Mudede has closed a foreign currency account held with the Reserve Bank of Zimbabwe (RBZ) after failing to recover US$7 million deposited with the central bank.
A recent parliamentary report said following the closure of the RBZ account, the registrar’s general resorted to keeping revenues collected at its offices in violation of the country’s banking requirements.
At one stage during a visit by members of Parliament (MPs) the money kept at the offices amounted to nearly US$253 000 and 88 000 Rand.
The RG’s Office is said to have since opened accounts with various other banking institutions.
“Regarding the violation of banking requirements, the registrar general’s office used to bank all its money with the RBZ. However, the department could at one point not get the money.
“A total of US$7 million could to date not be recovered,” the parliamentary report said.
The report added that MPs had quarried why the RG’s Office was retaining 100 percent of all revenue collected, when the law authorized it to keep 10 percent only.
“The department is authorized to retain 10 percent of all revenue collected for purposes of financing its operations.
“The department was however retaining 100 percent apparently on the basis of a variation minute issued by treasury dated 5 September 2002 and expired on 31 December 2003.
“It is considered that the variation is invalid as it cannot override a determination which was passed by Parliament,” the report added.
Meanwhile the RG’s department is just but one of several institutions and companies that have failed to recover money deposited with the country’s undercapitalised central bank.
The RBZ recently extended for another six months special bonds issued to gold miners in lieu of deliveries after failing to honour them when the matured at the beginning of the month.
The country’s biggest platinum miner Zimplats is also owed US$34 million.
(Source)