Company ordered to pay EswatiniBank E84m
MBABANE – The High Court has ordered Cardo Property Developers (PTY) Limited to pay the Eswatini Development and Savings Bank a sum of over E84 million.
The money was advanced to the company for the development of a commercial centre at Ngwane Park in Manzini, which the bank is now entitled to sell through a public auction.
The order directing Cardo Property Developers (PTY) Limited to pay the bank an amount of E84 372 990.12 was issued by Judge Bongani Dlamini yesterday. The court also directed the defendant (Cardo Property Developers (PTY) Limited) to pay the amount at the rate of prime plus two per cent per annum, calculated from March 10, 2023, to the date of fulfilment of the judgment. Further, the defendant was ordered to pay the costs of suit on the scale, between the attorney and own client, including the collection commission.
Declared
It was further the court’s ruling that, the immovable property described as Portion 10 of Farm Valentia No 27 in Manzini, measuring 9839, was hereby declared executable.The court also ordered that the property described as Portion 15 situated in the Manzini Region, measuring 1607 held by the mortgagor was also declared executable.
The genesis of the matter is that, the plaintiff issued simple summons against the defendant on April 3, 2023, claiming payment of the sum of E84 372 990.12 in respect of a loan disbursed by the former to the latter. The defendant filed a notice of intention to defend against the simple summons, as well as an application for summary judgment, in terms of the relevant rules of court. In terms of the plaintiff’s declaration, the parties entered into a written finance facility agreement on February 18, 2022.
In terms of the agreement, the bank agreed to lend a sum of E76 422 897.68 to the defendant as a commercial housing loan for the development of a commercial centre at Ngwane Park, in Manzini. The defendant agreed to pay interest on the balance of the initial capital sum, at a prime rate plus two per cent per annum calculated daily and charged monthly in arrears.
The defendant further agreed to pay the plaintiff the usual and customary bank charges and commission, while also acknowledging the bank’s right to adjust some from time to time.
It was also part of the terms of the agreement that the defendant was expected to repay the loan amount in 120 monthly instalments at the rate of E782 000 per month. The defendant breached the agreement in that it failed to pay the due installments of the loan facility.
The court was told that as of May 10, 2023, the outstanding amount of the loan facility amounted to E84 372 990.12.
During the argument, the defendant submitted that in order for the draw down or payment to be made (from its accounts), it appointed two directors, Mathew Sprague and Bobby Makhanya to authorise payment. The defendant submitted that the authorisation, upon being made electronically, was to be confirmed with the authorised signatories by the bank.
Transactions
According to the defendant, contrary to the authorisation agreement, the bank allegedly allowed several transactions (payments) to be made without the requisite authorisation and without verifying same with all its (defendant) directors, who were authorised signatories, in particular, Bobby Makhanya.
It was further the defendant’s argument that the alleged payments, which were purportedly made without authorisation and without verification by the bank, resulted in payments that were fraudulent, not due and not for the benefit of the bank.
It was alleged by the defendant that the signature of Bobby was implanted electronically, hence, the payments appeared authorised but the bank allegedly did not verify with him.
The defendant then implored the court to note that there was currently a forensic audit that it was currently carrying out and the amount was set to increase when same had been finalised.
Fraudulent
Further, the defendant has pleaded with the court to take into account that payment of these alleged fraudulent amounts and without authorisation had a negative impact on its liability as it increased the disbursed amount and its interest.
In his judgment, Judge Dlamini, in his view there was nothing stopping the defendant from conducting a proper forensic audit on its bank account and once it had an outcome of the investigations, to then institute proper legal proceedings against any party liable in terms of its findings for any loss it might have suffered.
The court said, it might be premature to be pointing fingers at anyone as investigations were ongoing. The court noted that the evidence that was presented in court demonstrated that some of the payments complained of, were actually directed to other companies owned by the very same directors of the defendant.
The bank was represented by Kenneth Motsa of Robinson Bertram while for the defendant, was Sipho Madzinane of Madzinane Attorneys