via Things fall apart for Tetrad Bank | The Herald June 6, 2014 by Fidelis Munyoro
The National Social Security Authority has been given the green light to attach Tetrad Bank property to recover nearly US$5 million owed to it by the embattled bank.
The bank, which is reeling under a serious liquidity crunch, has been failing to service its loans with many creditors. Last week, High Court judge Justice Happias Zhou granted a default judgment against Tetrad Bank after it failed to defend the claim.
He ordered that properties belonging to 10 companies that had given surety mortgage bonds to NSSA in respect of their immovable properties in Harare be attached.
“The first and eleventh defendants be and is hereby ordered to pay the sum of US$4 988 564 29 together with interest thereon at the rate of 7 percent per annum with effect from 11 September 2013 up to date of payment in full and such interest being capitalised monthly,” reads part of the order.
“The immovable properties situated in the district of Harare, which properties are described in the schedule hereto, be and hereby declared especially executable.”
NSSA had sued the bank along with 10 other companies that acted as guarantors for the loans advanced to the troubled-financial concern.
NSSA general manager Mr James Mwaiyapo Matiza represented the company and in his papers stated that sometime in September last year, NSSA and Tetrad Bank entered into a verbal agreement in terms of which the company granted loans amounting to US$953 000.
According to the agreement, interest would accrue on the loans at the rate of 7 percent per annum and such other rates and interest applied by NSSA from time to time being capitalised on monthly balances.
It was also agreed that Tetrad would be liable for the valuation and bond registration fees.
“The loans were advanced subject to the plaintiff’s special and general lending conditions,” said Mr Matiza.
“They would be repaid on monthly dates between October 2013 and November 2013 and in the event of default in paying instalments due, the full sum of the outstanding would automatically become due and payable.”
Mr Matiza stated that the 10 companies whose properties would be attached passed surety mortgage bonds to NSSA of immovable properties as security for the loans.
“The second to eleventh defendants guaranteed the repayment of these loans as sureties and co-principal debtors with the first defendant,” he stated.
After the bank reneged on its obligation to settle the loans, Mr Matiza said, NSSA issued summons in a bid to force it to repay, but nothing materialised.