MMD must go for convention-Kaingu

Four key witnesses who testified and won the K14 billion Development Bank of Zambia (DBZ) case against the defunct Zambian Airways have been fired from the Bank.

The four key staff included the company Managing director Abraham Mweenda, Head of Credit- Hepzibah Similenda Namwiindwa Beyani, the Legal Counsel Musenga Andrew Musukwa and Caiaphas Mwanakwale Habasonda, who was director for Credit and Portfolio Management.

The dismissal was confirmed by DBZ board chairman Robert Chomba.

The quartet testified and won the case for the Bank when High Court Judge Nigel Mutuna found that the K14 billion loan had been obtained by fraudulent misrepresentation.

Mr Chomba has insisted that, “the case is with the bank whether they leave or not. It does not change whether the individuals leave or not since the records are still filed at the bank”.

The case was earlier this year sent back to the High Court by a Supreme Court ruling following an appeal filed by the defendants JNC Holdings Limited, Post Newspaper Limited managing editor Fred M’membe, Director of Public Prosecution (DPP) Mutembo Nchito and Nchima Nchito who contested the Mutuna Judgment that ruled in favour of the Bank.

Former DBZ director Abraham Mweenda testified of government interference that influenced the obtaining of the loan by the airline. He also rejected government’s attempts to withdraw the matter from the courts.

Mr Mweenda said the Bank attended a meeting with the Minister of Finance initiated by ZA management whose main purpose was the restructuring to enable Finance Bank (Z) Limited extend further funding to the company.

He also revealed that the Minister of Finance had summoned meetings that led to the loan agreement.

Director for Credit and Portfolio Management Mr Habasonda testified that he doubted Zambian Airways capacity to repay the K14 billion because the of the poor state of aircrafts pledged as security in the loan, and other preferential creditors like the Zambia Revenue Authority (ZRA) that would incapacitate the company’s ability to pay back the funds.

Mr Habasonda testified how Mutembo Nchito pressured him to finalise arrangements for the Bank to enable the company access funds from Finance Bank (Z) Limited.

Legal Counsel Mr Musukwa’s testimony highlighted terms of the syndication loan agreement, the security sharing agreement; and assignment of receivables.

Head of Credit- Hepzibah Beyani testified that loan schedules were not observed as she explained the details with dates and amounts due, but which the Airline failed to adhere to.

According to Judge Mutuna’s findings, the witnesses proved that assessments of the security also concluded that the Airline would not recover the funds lent out on account of other creditors including the ZRA with whom they needed to clear huge payments.

The Legal Counsel in his testimony explained the syndication of the loan to the airline, including issuance of notices for such meeting that would considered the loan application.

In the Judgment, it was revealed that a meeting was arranged by the Airline management with the Minister of Finance for the purpose of restructuring to enable Finance Bank extend further funding to the company.

The Legal Counsel explained that from evidence provided, in case of cessation of business, the airline could not pursue the route of converting the debt into equity because the object of the transaction had been extinguished, and the company could not revert to the loan as it would be relinquished.

And Zambian Voice executive director Chilufya Tayali said whilst documentation on record was enough to show what could have transpired, there was need to recall the persons who were directly involved in the matter to bring in a personal ambiance to the case.

He said the people who handled the matter would give witness to what actually happened, adding that human feeling could not be substituted for documentation.

“Especially, that it is a suspicious matter, DBZ should allow them to come to the trial and give evidence as first hand witnesses.

“It is very likely that some things could have been done under the carpet, without proper documentation which makes it necessary for the four witnesses to be called to the stand despite them not being part of the bank anymore,” he said.