adminFidelis Munyoro Harare Bureau
Harare businessman, Eric Rosen, has allegedly refused to settle more than $50,000 of an outstanding debt to a local bank, arguing that the interest and penalties charged on the loan are tantamount to daylight robbery. Rosen, through his company, Eric Rosen (Pvt) Ltd, obtained a loan totalling $100,000 from ZB Bank between February and March 2013.
This was after the parties entered an agreement in terms of which the bank would extend to the businessman a revolving credit facility of up to $50,000.
Under the agreement, ZB Bank disbursed to Eric Rosen, on a revolving basis, including rollovers, total capital amount of $264,371.25.
The bank charged total interest of $20,082.49 plus bank charges of $3,475.76, bringing the total payable to the bank to $287,929.50.
Rosen, who is cited together with his wife Elizabeth and their company Eric Rosen (Pvt) Ltd, allegedly failed to make punctual payments under the facility but later managed to pay back $236,272.44 including rollovers by end of January this year.
This left the couple with a balance of $51,657.06 which they are allegedly refusing to settle.
This prompted ZB Bank to sue the couple and their company at the High Court to recover the outstanding balance.
According to the ZB Bank claim, the couple bound themselves as sureties and co-principal debtors with Eric Rosen (Pvt) Ltd for payment of any and all monies due to the bank by the company.
The bank further stated in its claim that in terms of the agreement, interest was to accrue on the credit facility at the rate of 30 percent per annum.
It was also agreed that in the event of the company defaulting on making due and punctual payment of any outstanding amount upon the expiry of the facility, the arrears were to attract an interest of 50 percent per year.
According to the bank, Eric Rosen agreed to pay bank charges regarding the administration of the account.
Through their lawyer, Tinofara Hove of TK Hove and Associates, the couple is denying that the total amount payable to the bank is $287,929.50.
“The defendants (the couple and their company) aver that they were advanced $50,000 on February 20, 2013 and another $50,000 on March 19, 2013,” said Hove in the defendants’ plea.
Hove challenged the bank to prove that the amount payable to it is $287,929.50.
He said his clients deny owing the bank the balance of $51,657.06 as alleged and contends that the interest that was being charged by the bank was excessive in the circumstances.
“The defendants aver that the penalty clause is void and unenforceable on the grounds that it is usurious,” said Hove adding, “the interest rate of 50 percent is against public policy and therefore unenforceable.”
The civil trial, which was supposed to commence yesterday before Justice Joseph Martin Mafusire, was deferred to a later date during the course of this month.
Online Reporter