The commercial bank lent Cde Mliswa’s Saltlakes Holdings money to buy tobacco from farmers and the politician bound himself as surety and co-principal debtor. Saltlakes did not pay back the loans as per agreement, resulting in the bank filing the lawsuit in which Cde Mliswa and Saltlakes are cited as defendants.
In the summons filed at the High Court on October 6 this year, CBZ argued that it released $2 million to Saltlakes to finance the company’s business of buying tobacco from farmers.
In terms of the agreement signed by the parties on February 17 2011, $1 million was released to Saltlakes, being a carry-over of facilities from the 2010 tobacco buying season.
Another $1 million was released to Saltlakes as working capital to finance the purchase of tobacco in the 2011 season.
According to the agreement, Saltlakes was obliged to pay back the first loan of $1 million by December 31 2011 and the second one expired on December 31 2012.
The parties also agreed that interest would be charged on the figure. Saltlakes breached the agreement and, despite numerous demands, the company has not repaid the loan.
“The first and second defendants (Saltlakes and Cde Mliswa) breached the terms of the overdraft loan facility agreement by failing to repay the principal amount and interest fully and punctually when they fell due in terms of Clause 9 of agreement,” read the plaintiff’s declaration.
By October 6, interest had accrued and the debt had ballooned to $2 745 092,72.
CBZ wants the money to be paid back with interest calculated at the rate of 28 percent per annum from the date of issuance of summons to the date of final payment.
In a related case, Bak Storage Private Limited is suing Saltlakes for $94 272, being unpaid storage fees for bales of tobacco that were warehoused at Bak Storage’s premises.
In excess of 26 000 tobacco bales were taken to Bak Storage between October 31 2008 and June 2009 as per agreement.
Bak Storage offered some additional services like sewing of the bales, sorting of the bales, handling of the bales and others for a fee. It is Bak Storage’s argument that Saltlakes did not pay the bill despite demand.
That prompted Bak Storage to file summons claiming the money. In response, Saltlakes filed a counter-application demanding payment of $2 million, being compensation for tobacco bales damaged while in storage.
The case is yet to be heard at the High Court. herald