Former business partners in property wrangle

Staff Reporter

 

Chief executive of a local financial services advisory company, Bard Santner Markets Inc, Senziwani Sikhosana and his business entities have dragged former Access Finance boss Singathini Raymond Chigogwana and associate enterprises to court over townhouse properties worth US$320 000.

 

Sikhosana and Chigogwana are former business partners who have had a bruising shareholding battle over shareholding and attendant unfulfilled promises.

 

They are currently at battling over a real estate development – No. 36 Mountbatten Complex – in Marlborough, Harare, which has 37 townhouse units valued US$3.9 million. Three of those properties are subject to the court action initiated on Friday.

 

This comes as their acrimonious shareholding fallout which has been raging for months intensifies.

 

They were business partners running several companies, Access Forex (Pvt) Ltd, Access Finance (Pvt) Ltd, Tara Capital (Pvt) Ltd, Thirty-Six Mountbatten (Pvt) Ltd as well as Access Forex SA (Pty) Ltd, until a nasty fight broke out over shareholding last year, leading to the court action.

 

The battle over the companies’ equity and properties has left the business on the brink of implosion after the two key shareholders exited the business in two separate deals during the row.

 

Sikhosana left last year and Chigogwana this week.

 

The applicants in the High Court case – HC1007/23 – over properties are Sikhosana and his entities Ferden Investments, Rock Drill Mining and Seanmart Investments, while the respondents are Chigogwana, Bwerinofa, Thirty-Six Mountabatten, Access Finance, Access Forex, Tara Capital, The Sheriff of the High Court and the Registrar of Deeds and Companies.

Sikhosana wants Chigogwana to transfer the properties which were part of their bitter split settlement to him in real estate or cash form. If that is not done, he wants the court to issue an order to attach of his former partner’s assets to settle the remaining part of the deal.

He also wants his erstwhile colleague to pay all transfer taxes, imposts and costs associated with the deal.

In his application, Sikhosana says in terms of clause 9 of the agreement of sale of his shares and property as well as the share purchase agreement, he should put Chigogwana in mora (default) to address the issue within 14 days. In the event that the breach is not rectified, he shall have a right to cancel the agreement or demand redress in casu (during the case).

As chief executive, Chigogwana owned 54% shareholding, Sikhosana, who was managing director, 20% and their chairman Isau Bwerinofa 26%.

Before the fallout, their businesses offered various payment solutions and remittances in the local, regional and international market.

The remittances business in Zimbabwe has been lucrative due to the need for efficient financial solutions in the current digital environment. Access Finance has been thriving in that market, serving individuals and Zimbabwe’s biggest companies.

In his 2023 mid-term monetary policy statement, Reserve Bank of Zimbabwe governor John Mangudya said as at 30 June international remittances through official channels amounted to US$1.4 billion, a 4% increase from US$1.3 billion recorded in the same period last year.

The shareholding bickering has been going on for two years now.

After their blazing row and acrimony originally emanating from Chigogwana’s reneging on a deal to sell 10% shareholding to Sikhosana, the two agreed to part ways. This followed failed mediation efforts. Their dispute left the company at risk.

As part of the resolution process, valuation was done and Sikhosana decided to sell his interests in the related companies for US$1 million.

However, another wrangle subsequently erupted over the shareholding price and after months of back and forth talks a settlement was reluctantly agreed to at US$600 000.

The US$600 000 buyout deal included a cash payment of US$280 000 less US$140 000 as an offset transaction over Sikhosana’s debt to the company, with the US$140 000 balance being paid into two installments of US$80 000 and US$60 000 separately.

It was also agreed Sikhosana would get three townhouse units valued at US$320 000. These are the properties now subject to court action.

The cash payments were delivered, but the properties and title deeds have not yet been transferred.

During the course of the dirty fight, Chigogwana also sold his shareholding in Access Finance and other entities before Sikhosana got his full payment for his own sale, specifically title deeds for the three townhouse units.

This week it was announced Chigogwana has now quit Access Finance and related entities as chief executive with effect from 1 October and would be replaced by Salim Eceolaza, former Simbisa Brands Limited group finance director, who steered its unbundling from Innscor Africa Limited and oversaw its listing on the Zimbabwe Stock Exchange.

After the shock news of Chigogwana’s divesting and stepping down from Access Finance, Sikhosana rushed to court to demand the outstanding payment, arguing his properties cannot be part of the takeover deal as they are encumbered in the buyout arrangement.

Chigogwana and Sikhosana were business partners in a successful financial venture around Access Finance, associated with several entities that offered various payment solutions and remittances, since 2014

The remittances business in Zimbabwe has been lucrative due to the need for efficient financial solutions in the current digital environment and Access Finance has been thriving in that market.

In his 2023 mid-term monetary policy statement, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said as at 30 June international remittances through official channels amounted to US$1.4 billion, 4% increase from US$1.3 billion recorded in the same period last year.

Sikhosana wants the court to declare:

“The court application to compel transfer of the immoveable property known as Units number 19, 8 and 22 in certain piece of land situate in the District of Salisbury called Lot 88 Marlborough Township of Marlborough measuring 1.1525 hectares, held under deed of transfer No. 3816/2027 dated 27^th September 2017 be and is hereby granted.

“The 1^st, 2^nd and 3^rd respondents (Chigogwana, Bwerinofa and 36 Mountbatten respectively) be and are hereby ordered to ordered to sign all transfer papers, make all appearances, pay all tax obligations and related imposts as may be necessary to effect transfer of transfer Units number 19, 8 and 22 in certain piece of land situate in the District of Salisbury called Lot 88 Marlborough Township of Marlborough measuring 1.1525 hectares, held under deed of transfer No. 3816/2027 dated 27^th September 2017 to the 2^nd, 3^rd and 4^th applicants (Ferden, Rock Drill and Seanmart) respectively within 14 days of the granting of this order.

“In the event that 1^st, 2^nd and 3^rd respondents fail or refuse to transfer the housing units as ordered in (1) above, then in that event 4^th respondent be and is hereby authorised to sign and execute all papers, attach and sale in execution such property of the 1^st, 2^nd and 3^rd respondents as is sufficient to pay for all and any lawful taxes, imposts and costs as are conventionally payable by a transferor and do all such things as are necessary to pass transfer of units 19, 8 and 22 to the 2^nd, 3^rd and 4^th applicants respectively and the 5^th respondent be and is hereby ordered to effect transfer in his records to give effect to the transfer.

“Alternatively, the 1^st, 2^nd, 3^rd, 4^th, 5^th and 6^th Respondents jointly and severally the one paying the other to be absolved be and are hereby ordered to pay the to the Applicants the sum of US$320 000.00 (three hundred and twenty thousand American dollars) being the agreed value for Units number 19, 8 and 22 in certain piece of land situate in the District of Salisbury called Lot 88 Marlborough Township of Marlborough measuring 1.1525 hectares, held under deed of transfer No. 3816/2027 dated 27^th September 2017.

“In the event that the 1^st,2^nd, 3^rd, 4^th 5^th and 6^th respondents fail or refuse to pay the sum of us$320 000.00 (three hundred and twenty thousand American dollars) in terms of paragraph (4) above, then in that event the 7^th Respondent be and is hereby authorised to attach such property of the 1^st, 2^nd, 3^rd, 4^th, 5^th and 6^th respondents and cause to be realised the sum of US$320 000.00 (three hundred and twenty thousand American dollars) and pay over to the Applicants.

“The 1^st, 2^nd,3^rd, 4^th, 5^th and 6^th respondents jointly and severally the one paying the others to be absolved be and are hereby ordered to pay the Applicants’ legal costs at the rate of attorney and client scale in terms of clauses 11.7 of the individual agreements of sale.”

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