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Herald Business understands, will seek to annul the agreement for the sale of Renaissance Merchant Bank Limited.
RFHL’s former board of directors sold the bank to the National Social Security Authority, following liquidity problems linked to financial impropriety unearthed at the bank.
But the ousted RFHL founding chief executive subsequently filed a High Court application seeking to bar the disposal of the bank to NSSA. However, Mr Timba withdrew his application against all respondents shortly before the case was heard in the High Court last week on the grounds of legal technicalities around the case.
Sources said Mr Timba withdrew court case HC 9989/11) because the sale of Renaissance Merchant Bank he sought to block had already been completed, making it of academic relevance. Further, the High Court recently ruled that the board that presided over the sale of Renaissance Merchant Bank Limited was illegal.
The RFHL board completed the disposal of the bank when it had been fired by shareholders with a 77 percent stake in the group, the parent company of the merchant bank.
“An example of what happened is, say you want to prevent a certain man from making your daughter pregnant. You approach the court for an order barring him from doing so. But before you get the order you realise that she is already pregnant,” said a source close to the case. This means that the outcome of the court proceedings would have become an academic issue.”
As such, Mr Timba reportedly withdrew the case so that he would file a fresh one in the context of the new state of affairs. But the former board of RFHL, ousted in February this year by shareholders, led by Professor Christopher Chetsanga, last Friday issued a statement to say the legal challenge by Mr Timba against the sale of Renaissance Merchant Bank did not succeed.
The statement seemed to imply that Mr Timba had resolved to rest his case “in the interest of depositors above any personal interests in line with the former board’s concern”.
“Mr Timba had sought to, inter alia, stop the disposal of RFHL’s shares in Renaissance Merchant Bank Limited or any other third party. The legal challenge by Patterson Fungayi Timba of the transaction, in terms of which NSSA acquired 84 percent of the issued share capital of Renaissance Merchant Bank Limited did not succeed,” said Professor Chetsanga in a statement.
“As regards the significant legal costs incurred by all parties in this matter, this aspect of the dispute remains to be determined by the High Court. All parties have insisted Mr Timba pay their wasted costs, as High Court may determine,” he said.
But sources said Mr Timba only withdrew the case to file a proper legal claim seeking to have the sale of RMB declared null and void. The RFHL founding CEO lost control of RMB after investigations by the RBZ reported financial impropriety involving hefty personal loans to directors and related parties. The probe also discovered a huge capital hole on RMB’s balance sheet, but Mr Timba disputes its magnitude.Investigations by the RBZ followed a wrangle between Mr Timba and Indian businessman Mr Jayesh Shah over additional penal charges for failing to repay a US$5 million loan.
Online Reporter