Langford Estate land dispute stalls Fidelity Housing Project

Business Reporter

A protracted ownership dispute between CFI Holdings Limited and Fidelity Life Assurance of Zimbabwe over Langford Estate has become a significant risk to millions of policyholder funds, effectively stalling FLAZ’s planned investments.

The insurance company is currently unable to access the land for housing development due to the long-standing legal battle, with the matter presently before the High Court.

FLAZ says the project would help alleviate Zimbabwe’s acute housing shortage.

However, key shareholders of CFI, which owned the land, primarily Willoughby’s Investments, argue that the original transaction was “illegal” and “fraudulent,” claiming it was never approved via a special resolution.

Proponents of the reversal claim the land was undervalued at US$2,70 per square meter, compared to market rates of approximately US$6 per square meter at the time.

Since 2017/2018, CFI has sought to nullify the deal to recover the property, resulting in legal proceedings that have persisted for over six years.

At the heart of the impasse is an 834-hectare plot in Harare South. FLAZ earmarked the site for large-scale residential development after assuming CFI’s liabilities more than a decade ago under a US$18 million debt-swap deal.

That 2015 Debt Assumption and Compromise Agreement between FLAZ, CFI and five commercial banks was designed to stabilise the agro-industrial firm’s balance sheet while unlocking land for property development.

The agreement successfully prompted lenders to halt court-sanctioned foreclosure proceedings.

While the debt-land swap was approved by shareholders of both companies during Extraordinary General Meetings in October 2015, CFI has yet to grant access to the land. Instead, the firm is seeking to reverse the deal — a move that has halted all development plans.

Sources close to the matter told this publication that US$18 million in policyholder funds is now at risk, potentially affecting over 140 000 principal policyholders. The standoff has stalled the construction of approximately 11 000 residential units.

The project was expected to contribute significantly to Zimbabwe’s housing delivery targets under the National Development Strategy and Vision 2030.

Currently, Zimbabwe faces a housing backlog estimated at over about million units, driven by rapid urbanisation and a limited supply of affordable homes.

Government policy has recently relied on public-private partnerships and institutional investors, such as pension funds and insurers, to bridge this gap.

The Langford project is regarded as a vital private-sector contribution to the national housing stock, aligning with the National Human Settlements Policy’s focus on sustainable urban development and densification.

“If Fidelity had been allowed to begin construction by now, it would have significantly reduced the national housing deficit.

“Fidelity is talking of something that is now over 12 years old. The use of policyholders’ funds led to this. Some policyholders have never benefited from this.

“CFI has moved on-site, they have put up guards at the place so that FLAZ cannot even access that land.

“They are farming, they have got cattle on the land, centre pivots and there is some sort of manufacturing going on.

“So, CFI is absolutely losing nothing; there is a whole economic activity going on. The origins of the transaction trace back to financial distress at CFI, where mounting debt raised fears of creditors seizing assets at undervalued prices,” the source said.

No comment could be obtained from FLAZ chief executive Mr Reginald Chihota by the time of going to print yesterday.

The debt assumption agreement with Fidelity was intended to prevent that outcome while preserving asset value through structured development.

Concerns are now mounting over the slow pace of the legal resolution and its broader implications for investor confidence.

The outcome could set a major precedent for how long-term savings invested in property-backed instruments are protected, especially as the country grows increasingly dependent on private funds for                                      infrastructure.

For now, the potential to deliver thousands of homes and safeguard millions in policyholder funds remains in limbo.