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Zimdef entered invested US$300 000 with Genesis between September 28 and October last year and the bank was supposed to pay the principal investment amount plus 20 percent interest.
Zimdef through their lawyer, Mr Caleb Mucheche of Matsikidze and Mucheche Legal practitioner filed a High Court application seeking an order for the bank to pay back US$156 292.72 plus 20 percent interest calculated up to the date of full payment.
“The wake up call for Zimdef came as a result of The Herald edition of 30 July, 2011 where Genesis Bank was listed as one of the six banks in the country that is undercapitalised and ailing,” Mr Mucheche said in his court papers.
“Zimdef is extremely concerned that it may lose its monies because the bank can go under liquidation due to the liquidity crunch as exposed by the Reserve Bank.
“It is least expected for a bank to fail to pay a debt because it is always supposed to be prudently and financially sound, Zimdef has completely lost confidence in Genesis Bank’s financial health.”
Mr Mucheche indicated that Zimdef invested US$300 000 with Genesis Bank between September 28 and October 8, 2010.
The bank however, failed to redeem the full amount at the time of maturity and Zimdef is owed US$199 848, 33 plus interest as at April 26 this year.
Genesis Bank however, responded with a proposal to settle the debt paying US$100 000 on May 31 and the remaining US$99 848, 33 plus interest that would have accrued by June 30 this year. Zimdef said Genesis failed to fulfill its promises and paid only US$45 000.
In another letter, Genesis Bank indicated that it had not received the expected cash flow and paid US$45 000 into the Zimdef CBZ trust account.
The bank also proposed to pay the balance of US$55 000 on June 15 this year and the remaining US$99 848, 33 plus interest to be paid as previously stated on June 30.
Mr Mucheche indicated that Genesis paid a paltry US$5 000 on June 15 and not the agreed US$55 000.
Genesis also failed to settle the debt on June 30, the date which the bank had said it would clear the outstanding debt.
Mr Mucheche wrote to the bank on July 11 warning that Zimdef would seek legal recourse against the bank.
Genesis Bank responded confirming that they owed the fund US$156 292, 72 plus interest. The bank however, did not indicate its payment plan leading to the High Court application.
Online Reporter