And a witness testified that some sectors of the Government were not comfortable with DBZ‘s involvement with Zambian Airways’ transactions and that by giving out its security, the bank suffered some peculiar losses.
Zambian Airways obtained a loan from DBZ but defaulted in paying back and parties entered into another agreement of consolidating the loan into equity shares.
However, the airline suspended its operations before the transactions were concluded.
Andrew Musukwa, a former DBZ company secretary and now a private practitioner, testified before High Court Judge Albert Wood that even if he was not privy to all the information that resulted in the bank agreeing to convert from debt to equity shares, there were contractual negotiations going on.
“In financial matters equity includes shares or a position and it is this position that JCN Holdings and the Post Newspapers undertook to buy back before the actual shares were acquired by the bank,” he said.
He said even if DBZ did not acquire the shares from Zambian Airways, it had paid for them through the loan that was given to them.
Mr Mutembo Nchito in cross-examination alleged that the Post Newspaper had indicated in a letter to DBZ that it would buy back the shares from the bank at a later stage and that the bank was disadvantaged when it gave out its security because it suffered pecuniary loss.
“The reason why DBZ gave out the security was because it realised that given the state of the company its security was safe and improved its chances of recovering,” he said.
Mr Nchito asked Mr Musukwa why DBZ did not sue the airline when it was part of the procedure but he said he was not aware because he was no longer with the bank as he had left and formed his own law firm.
[Times of Zambia]
Ba LT trail or trial? Chizungu, chinabwela na boat…
Nchito needs to pay back some of that free cool cash he was paid for doing nothing over the chiluba case.
Iwe Chi London you are an *****!! Why don’t you ask George Kunda to pay back the whole amount? Out of 12million pounds Nchito got less than 1 million and the rest went to white lawyers right there in England. One of them is Tony Blairs brother! We nkoko we!!
Just wondering why it has to start so close to the elections. Its looks like in our country things are quite connected to the powers that be. This case should have been disposed off long time ago. Justice delayed is justice denied. We need to be serious in the way we dispense justice. It looks like every case is professionally delayed to inflict much damage..Look at the Mpombo case, which to me will effectively finish off the old man. Need I say much..
I cant comment because I dont have details
NCHITO ALINYUNYA M’MEMBE IN THIS DEAL TOO.
Vinjeru 1,
LT they are right to say -TRAIL begins. Further more use your dictionary or Google to know and understand the meaning of the word and the context in which LT used it.
I agree with you mwana, but, the context you are suggesting could be right if the opening paragraph was cast in that direction, but it is clear the author mispelt this word here. Read again.
LT when reporting on matters that are in court, it is best to report “for information only” and not allow comments. You could be, i presume, inadvertently committing contempt
Keen on seeing the end of this trial. The Nchitos and Membe used their connection with Levy Mwanawasa and Ngande Magande to further their business deals just like James Banda and some high ranking MMD officials are using RB to further theirs. Time surely catches up.
Every dog has its own day and M’membe, Nchito and other’s day is coming soon. Especially ka m’membe should be dealt with severely for misinforming Zambians.
@4, it takes time to build a complicated case like this and if the case is only ready for court now so be it. i am not aware that the courts of law, the police and other law enforcement agencies in zambia have shut down for the elections, or that criminals have received an amnesty for this period. in any case, even if the trial was to be delayed to next year it would still take place, unless you know any reason why it would not be so? also please note that mr sata has sued the celebrated chanda chimba iii during this same period. what is good for the goose is good for the gander!
pf flip flops and double standards will never cease to amaze. do these guys have any sense of shame? yesterday they were concerned about the public money in napsa, today they see nothing wrong with public money being abused by their allies. this is another proof of corruption in pf. ba pf please give us a break, public money is public money whatever the colour!!!
This is a civil trial and usually they take long to start because of preliminary issues that have to be done and high court judges have so many cases such that they are giving trial dates for next year.
Corruption is Corruption whether MMD or Not and these thing always do come out if you lose favour, Kanshi our Out going MMD be ready for your cases, if you ask me this are just around the corner.
This has nothing to do with corruption. This is a bad debt. Simples! In financial speak we call it a none-performing loan. Just ask all the Banks in Zambia they will tell you that they have such debts on their books. The only conclusion I can come up with is that DBZ is poorly managed. Any banker worth his salt would have carried out some due diligence on a prospective debtor before he lends out money. Besides when Zambian Airways was folding up, DBZ should have quickly grabbed any assets that ZA had. DBZ are i/d.io../ts. Simples!
Musiwa, the same poor management you talk of is what is indicitive of corruption and political interferance. A due diligence was not performed or if it was, the findings were ignored because DBZ shareholders, being the government, represented by politicians wanted the loan to go through. Magande was Minister of Finance at the time hence yielding influence over DBZ…… need I go on.
#14, There was Corruption in this case because the loan was given without any due didligence checks.Its quite likely DBZ was acting under pressure from an invisible hand, they were bullied into giving the loan. You wonder what the money was used for but its quite palusible part of it went into personal hands as all the parties knew this was a non-performing loan. The whole thing is full of corruption……
this case is going noway
The issues about ZA is not about what is being said in Public. The Public is always deceived. If one wants to know the issues about ZA one needs to listen to what is being said in Private. Cases of this nature are both Political and Corporate. If you want to do business in the right sense of the word then you cannot avoid Politics. Politics and Corporations are the same things. The question is “Who is in the political arena” at the time and “Who is in the Corporate” arena at the same time. Do these people share some common interests? Mwanawasa had shared some interests with some People in the corporate arena, but this didn’t mean that everyone who worked with Mwanawasa in Cabinet had suported Mwanawasa. Many cabinet ministers want a job nothing else.
#17 ATURU, thats what it is. Investors all over the world look out for enabling environment. Remember what happened to ANGLO?
While no. 7 The Truth Pains might be right, I think it is senseble to think that the word LT meant to use is TRIAL. On the case I will watch from the terraces and wait to see the events unfold.
So oneday I walk into a bank and ‘borrow’ some money…after while I fail to pay back the money and I ask the bank to convert the ‘loan’ into equity shares? Yah this is Mafia at its best..what Fatso and PF vuvuzela are saying is that they asked the Bank to sink its own cash by way of conversion? Where is consideration in this contract? Or was DBZ so daft it could see it was ‘buying’ back its own money? This does not border on a civil debt but more on a criminal swindle..And how could the Bank accept a ‘letter’ from the Post to buy back the shares at a later stage? Was there no time frame? Can 14 billion less interest be secured by a letter? Ah what theft is this..Was the letter in a form of a contract? Is this a Bank where is the Board?
i see “#20,cutherbert” has never heard of debt for equity swaps!!! bwana in the western world they are done all the time!! you need to get out more!!
This case is going nowhere, you can see Dora Siliya forced the liquidation of Zambian Airways to punish the Post without realising that by so doing she was ensuring that DBZ’s loan to the company was also liquidated. I still recall her claiming that “tax payers’ money cannot be missed with bad money”, now tax payer’s money has been lost in billions because of her stu’p’i’.di.ty. In my opinion, it is Dora and Kansundila who are supposed to be in the dock, not the Post or Nchito.
# 21 Cutherbert – Honestly, before you come to display such stinking ignorance of how financial markets work. This was a clean debt equity swap i.e. a refinancing deal in which a debt holder, in this case DBZ, gets a commensurate equity position in the debtor entity (Zambian Airways) in exchange for full (or partial) cancellation of the debt. The issue of consideration does not arise so please take you ignorance elsewhere, if you had a head worth anything, you will know this is what the Zambian government did with Finance Bank sometime back.
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