New twist to Croco ownership wrangle
TO P businessman Farai Matsika has raised 11 points challenging the High Court ruling, which concluded that he had fabricated documents in a bid to fraudulently snatch 30 percent shareholding in Croco Holdings, a company owned by his erstwhile partner, Moses Chingwena.
Matsika in documents filed at the Supreme Court that High Court judge Owen Tagu had made a number of mistakes in coming to the conclusion that he had sought to grab the company through the back door.
“The court a quo erred and misdirected itself on the facts and the evidence in holding that the second applicant (Fairgold Investments) is a wholly owned subsidiary of the third respondent (Croco Holdings) and as such the second applicant is not a minority shareholder entitled to bring an application in terms of Section 196 (1) and Section 198 of the Companies Act (Chapter 24:03),” Mmatsika argued.
He added: “The court a quo erred and grossly misdirected itself on the facts and on the evidence in finding that the application before it was on material falsehoods, whether as alleged by the respondents or at all”.
He also said that Tagu had made a mistake in finding that the cause of action had been taken out of time.
Matsika sought the setting aside of the High Court ruling, and demanded a forensic audit and valuation of Croco Holdings and 39 other entities.
“The third respondent be and is hereby ordered to pay the applicants the full value of 30 percent of its total issued ordinary shares and 30 percent of the value of its investments in the fourth respondent (Croco Investments) to the 38th respondent respondents within five days of completion of the forensic audit and valuation …,” part of the order Matsika is seeking reads.
The appeal follows after Tagu, in a strong-worded judgment, trashed Matsika’s claims of having acquired shareholding in Croco Holdings in May 2006.
Matsika, a former Croco chief executive, was left with an egg on the face after the court ruled that he had produced doctored documents to substantiate a false claim.
“In this case the entire application was anchored on dishonesty. The applicants (Matsika and Fairgold) sought to seek relief from this court by fabricating documents, a fabrication as amateurish as it is disrespectful,” Tagu ruled, before dismissing the application with costs.
“But then there was method in all this madness because even the founding and answering affidavits lacked nothing in wounded pride and dignity, but contained nothing of substance. For that there must be consequences to his pocket as the only antidote in the hands of the court to show its displeasure at such brazen abuse of the process of the court.”
In the application, Chingwena had argued that Matsika failed to place before the court evidence showing how he secured the 30 percent stake in the car firm.
While Matsika had claimed that Phibeon Gwatidzo of Baker Tilly Gwatidzo Chartered Accountants was the shares transferring secretary in 2006, it later emerged through Gwatidzo’s secretary that the accounting firm was not yet in existence at the time.
“By extension of logic, the applicants needed to explain why the share capital amount was expressed in United States currency which was not in use in Zimbabwe until sometime in 2009. They also should have taken the court into their confidence and explained how Baker Tilly Gwatidzo Chartered Accountants could have executed the share transfer documents in May 2006 when that firm only come into existence six years later in 2012, Tagu said. It is clear from the answering affidavit that the applicants did not deny that Baker Tilly Gwatidzo Chartered Accountants was established in 2012.
“Therefore, it is inevitable to conclude that the shareholders’ agreement and share transfer documents are fraudulent and of no probative value in the resolution of the present dispute,” Tagu said.