Chita Lodge sued over K97m debt
THE Development Bank of Zambia (DBZ) has sued Chita Lodge Limited and its managing director, Mr James Chungu over an unpaid debt of K97 million.
DBZ has also sued shareholder, Babsie Bulaya as the third respondent in the matter filed in the Lusaka High Court.
DBZ is seeking interest on the amount due of K97, 907, 282.31 as at October 25 this year, as well as interest on the same.
It also seeks an order of possession of the properties namely, stand no.3705, Lusaka, stand no.1450, Samfya and Subdivision no.21 of farm no.484a, Lusaka.
DBZ wants an order of foreclosure of the mortgaged properties and that the same properties are put on sale.
It also wants the court to order Chungu and Bulaya as guarantors to pay the said amount.
According to an affidavit in support of originating summons, DBZ employee George Lumpa stated that the bank and Chita Lodge entered into a loan agreement by facility letter dated April 17, 2013.
Mr Lumpa stated that by virtue of the said agreement, DBZ advanced to Chita Lodge a long term loan of K18 million subject to the terms and conditions stipulated in the agreement. He stated that the purpose of the loan was to finance building of a resort called Village of Luapula and purchase of four boats, a bus and furniture and fittings.
Chita Lodge was expected to pay the loan in 99 equal monthly instalments of K181, 181.18.
Mr Lumpa stated that in 2014, the lodge got another K4 million loan to finance additional cost of construction of the resort in Samfya.
The bank by another facility lettered dated August 14, 20217 advanced Chita Lodge a short term loan of K2, 825, 268.82.
Chita Lodge used the money to refinance a loan with Finance Bank Zambia Limited, so as to enable DBZ register a mortgage over Chita Lodge Kafue to enhance its security.
“That under the shareholder’s guarantee the second and third respondents covenanted with the applicant that they would pay the applicant on demand all money which would be due and owing to the applicant from or by the first respondent in the event of default,” Mr Lumpa stated.