THE Development Bank of Zambia (DBZ) has accused Director of Public Prosecutions (DPP) Mutembo Nchito of continuing to neglect or refusing to execute personal guarantee in the K14 billion syndication loan agreements which he obtained together with JCN Holdings and Post Newspapers in 2007 and has now risen to K33.5 billion at 20 per cent interest.
The bank says similarly JCN Holdings and Post Newspapers have failed, refused or neglected to pay the sum owed or any sum at all.
In its amended statement of claim filed in the Lusaka High Court dated June 3, 2014, the DBZ says by mid-2008 it was clear that in spite of the injection of US$5.5 million in the now defunct Zambian Airways, the airline was facing serious liquidity problems and was in arrears in the repayment of both interest and principal on the loan.
The bank says by clause 8.6 of the Syndication Loan Agreement executed by the bank, Mr Nchito was to give a personal guarantee for the repayment of the loan facility for the full value of US$5.5 million.
“Mr Nchito executed the said Syndication Loan Agreement on behalf of the company but did not and continues to neglect or refuse to execute the personal guarantee under the agreement aforesaid,” says the claim
The bank says by reason of Mr Nchito’s failure to execute the guarantee, DBZ suffered and continues to suffer a diminution in the security offered by the company for the repayment of the loan.
Subsequent to the Syndication Loan Agreement and at the instance of JCN Holdings, Post Newspapers and Mr Nchito, the parties executed a debt equity conversion agreement on October 6, 2008. In the same claim the bank now wants the JCN Holdings and Post Newspapers to buy back the stock equity from DBZ in the sum of K14 billion at 16 per cent per annum plus 8 percent margin of a floor rate of 20 per cent per annum whichever is higher from the date of the disbursement of the loan. The bank is also claiming interest as provided for in the terms of the equity buyback agreement and as undertaken by JCN Holdings and Post Newspapers and as determined by DBZ
“The bank is entitled to call upon Mr Mutembo Nchito to execute the guarantee as agreed by the parties,” the claim says.
The bank is also claiming for an order for specific performance that Mr Nchito executes a guarantee as envisaged and provided for under clause 8.6 of the Syndication Loan Agreement as a result of their frustration of the debt equity swap agreement by their decision to cease the company’s operations and or damages for misrepresentations. The statement explains that “desirous of expanding its operations, by inter alia, the acquisition of new equipment, the airline in 2007 approached Investrust to syndicate a loan facility in the sum of US$5.5 million to be secured against certain assets of the company.”
Investrust as the lead bank put together a consortium of banks comprising itself, Intermarket and DBZ who together as joint lenders agreed to provide banking facilities up to the sum secured.
DBZ’s portion of the loan was US$3 million, equivalent to K14 billion which sum was duly drawn and utilized by Zambian Airways. JCN Holdings is an investment company and at the material time a shareholder in Mine Air Services Limited trading as Zambian Airways while the Post Newspaper is a company engaged in business of newspaper publishing and held shares in Zambian Airways at the material time.
But some pipo will die na nkongola how can you pay that much.
This is what pro-poor means in PF,,, protect `the rich` and stuff the poor,,, donchi kubeba
All politics; is this matter not under stay given it’s still before the courts?
Is DBZ not, therefore, in contempt of court for publicly discussing a matter that is still before the courts? I suppose it’s justice the Zamunda way – settling the scores!!
It is unthinkable to have a DPP with such huge nkongoles. Mr Nchito needs to do the needful and resign his position of DPP and concentrate on sorting out his financial woes.
@Quest
Concur. This is just disgraceful. Zambian public officials are corrupt as hell. This is not acceptable conduct of a (DPP). Mutembo Nchito must be removed. Waiting for him to resign is a waste of time. This is a man without any morals. Is he not the one tussling to try RB? He owes more in corrupt loans than the amount in RBI, surely?
This is like a divine comedy, exposing the sinful at the helm of Zambian gov’t. Mutembo Nchito, is a pathological duplicitous individual.
I hope one day this issue will amicably be put to rest – which means – he owes is duty bound to pay their debt. There is no other justice than that.
Fred Mmembe and Mutembo Nchito borrowed money from DBZ and they are duty bound to pay it back regardless of the gimmicks they can come up with. This is even more imperative that both of the gentlemen are
a) Lawyers – a noble profession that demands integrity.
b) Business men – everybusiness man knows debt is equal to paying back at interest
c) Moralists – DPP high moral position in the country and Mmembe editor who quotes biblical quotations about honesty, integrity and righteosness – Time for the two men to live by these values.
d) Zambians – the money they owe DBZ (and ZRA in the case of the Fred’s Post) builds Zambia
This DPP needs to be fired do that he can go and clean up his mess, in the normal world he should have resigned.
In a NORMAL world he would be in JAIL for FRAUD and CORRUPTION!
That money of the non-performing loan from DBZ could have been used by honest businessmen to develop Zambia. Is this how PF Government promotes “development” ?????? NO, this is just more SATA BUFI! Donchi kubeba!
How can our Nation move forward when a CROOK is appointed DPP??
i think this case is being stalled deliberately. since when did i hear about this case coming before a court? i cant remember. even playboy’s case has been dispensed with in good time why delay this one?
Does it mean president has no people to appoint as Dpp?as long as nchito is their the drama will continue,seizure of assets is the only way to recover the money.33billion +$8m,and the foreign loans which nchito and mmembe owns is more than $60m.sata please clean your party now,you got nothing to lose at this stage in life .why is it that most of pf members have/had issues with the law,?
This is akin to High risk gambling. The borrowing wasn’t done in good faith. The parties to the loan, knew very well that the company was not doing very well. I guess DBZ loaned them the money on the basis of their status in society and not based on a viable business plan and on that point DBZ is getting its dues. However, the amounts in question are large and this is disadvantaging other borrowers of resources to fund other projects. These same borrowers in the mean time have constructed flats and properties in their names and continue to walk about on legal technicalities that the law was given to a legal entity Zambian Airways and not to the directors of Zambian airways.
Meanwh?le the cr?m?nal and venomous tox?c brazen hypocr?te Mmembe ?s busy attack?ng ABC (Ch?kwanda) who has not comm?tted any cr?me.
This is like a divine comedy, exposing the sinful at the helm of Zambian gov’t.
Mutembo Nchito, is a pathological duplicitous individual.
The Post is at the centre of all financial shenanigans.
Looks like Zambians can’t trust people in charge, even members of the Judiciary are questionable? Oh Dear!!
How do we clean up our society of all these individuals?
A fish rots from the HEAD!
Nothing will Happen….As Always the state will eventually forget about this loan and share the monies amongst themselves.
No law and order in ZED.
do what you want ,you are free my colleagues in zambia… Enjoy the stolen loot….
All the mess at hand PF government is to blame. Winter Kabimba was barred by one big fish for many National crimes. Why has it taken long time for Mtembo and Mmembo to date? I trust one day all these delays shall cost PF for failure to combat crime for some people,
Now that Post Newes paper nolonger supports PF governance that is when they can rash to crucify Mmembe.
Mr Nchito is an astute lawyer. The Bank…
1. says, “MR NCHITO EXECUTED …….”
The same bank
2. says by reason of MR NCHITO’S FAILURE to execute ……..
Who is the attorney for THE Development Bank of Zambia (DBZ)? The Bank has lost it big time…