By Tendai Kamhungira
Businessman Frank Buyanga’s Zimcor Trustees Limited and Boka Investments (Private) Limited have won in a property and share wrangle that had seen them being dragged to court by a UK-based tycoon.
The two companies and Matthew Boka had filed an appeal with the Supreme Court, challenging a High Court decision which had reversed the transfer of shares and the sale of a property initially owned by Rasar Investments (Private) Limited (Rasar Investments).
The respondent in the matter was Webster Rushesha, who had filed a High Court application on behalf of his two minor children, who were registered as Rasar Investments shareholders.
According to court papers, Rushesha bought a stand in Mount Pleasant before he left for the UK. Rushesha told the court he asked his brother-in-law Alexio Dera to set up a company called Rasar Investments. The property was then registered in the name of Rasar Investments as its only asset.
According to court papers, the directors of the company were Rushesha, his wife, and Dera, while the registered shareholders were Rushesha’s minor children.
The court heard that when Rushesha left for the UK, the property was leased to the South African embassy and the rentals were being paid directly into his bank account.
In February 2009, the court heard Dera concluded an agreement for the sale of shares in Rasar Investments to Zimcor, represented by its director, Buyanga.
The court heard that the directors of Zimcor then replaced the previous directors of Rasar Investments.
Subsequently, the new directors of Rasar Investments sold the property to Boka Investments, which was represented by its director Boka.
After a year, the court heard, Rushesha issued summons in the High Court, seeking to reclaim shares in Rasar Investments and the property.
He claimed that the sale of shares to Zimcor was a fraudulent sham orchestrated by Dera, adding that the subsequent sale of the property was invalid.
Even though the High Court found out that the agreement of sale was a disguised transaction to secure a loan advanced to Dera by Zimcor and Buyanga, the Supreme Court found out that the claims could not be substantiated.
The High Court had invalidated the sale, reinstating the previous directors of Rasar Investments in the process.
However, Supreme Court judges Luke Malaba, Paddington Garwe and Bharat Patel unanimously agreed that the appointment of Rushesha’s two minor children as directors was “patently unlawful”.
The court said given their age, the children could not have been the ones who appended signatures as company shareholders.
The court also found out that Rushesha had failed to satisfactorily explain some of the discrepancies surrounding the case.
“In my view, all of the foregoing demonstrates that Dera was not a credible or reliable witness. To sum up the net effect of all of the aforementioned evidential deficiencies was to irremediably undermine Rushesha’s case as pleaded in the summons and declaration,” the Supreme Court ruled.
“They demonstrate that the formation of Rasar Investments and its subsequent control and administration were severely afflicted by misrepresentation, probably fraudulent, rendering it almost impossible to ascertain the precise status and ownership of the company’s shareholding. It further set aside the High Court ruling, which it said was passed in error.”
The Supreme Court said the High Court blundered in upholding Rushesha’s claim and invalidating the sale and transfer of shares to Zimcor and the subsequent sale of the property to Boka Investments. Daily News