via Cambria sues Lonrho for $10m – DailyNews Live 15 July 2014
HARARE – Southern Africa-focused investment group Cambria Africa Plc (Cambria) has filed a
$10 million lawsuit against Lonrho in the United Kingdom High Court over alleged mismanagement and fraudulent misrepresentation in contracts.
Cambria — formerly Lonzim — said it seeks to rescind a $2,7m settlement it received from Lonrho in July last year and institute legal proceedings for total claims of $10m.
The group, with a diversified investments portfolio in Zimbabwe, had agreed to a final settlement of $2,7m from Lonrho relating to various claims over loan assets and alleged mismanaged contracts.
Lonrho has interests in African agriculture and hotel industries.
The settlement also ended Lonrho Hotels’ involvement at Cambria’s Mutare-based Leopard Rock Hotel, and Cambria has since indicated plans to sell the four-star resort.
Cambria claims that at the time, three leases of aircraft to previous Lonrho subsidiaries were excluded from the settlement.
“…claims for $8,8m relate to three aircraft previously owned by Cambria, which were leased to then subsidiaries of Lonrho.
These alleged claims include fraudulent misrepresentations by Lonrho to Cambria relating to the purchase of one of the aircraft by Cambria from Lonrho, breaches of contract, negligence and breaches of fiduciary duty resulting in (a) unpaid maintenance reserve and lease charges; (b) diversion of insurance claims proceeds by Lonrho to one of its subsidiaries which were properly due to Cambria; and, (c) loss of value of the aircraft due to the poor condition of the aircraft when they were repossessed by Cambria, including, but not limited to, missing engines, missing avionics, and missing propellers,” Cambria said.
Other claims are in relation to monies which Cambria alleges to have been unlawfully transferred by Lonrho for the benefit for one of their subsidiaries whilst it was managing Cambria in 2008.
Last year, Cambria hailed the $2,7 million settlement as an opportunity, which availed funds for further attractive investment opportunities in its Zimbabwean subsidiaries, Payserv and Millchem.
Payserv is an established payments processing and business process outsourcing, targeted at financial and related sectors.
Millchem is a leading distributor of industrial solvents and metal treatment products has, which has established a meaningful leading position in the country while maintaining a foothold in Zambia and Malawi.
Following the settlement, Cambria’s chief executive Edzo Wisman said “we are pleased to have worked effectively with Lonrho to make this settlement possible. The disputes between the parties have been settled on terms satisfactory to both sides.
At Cambria, our team looks forward to pursuing our growth strategy with this situation firmly behind us.”
In the meantime, Cambria said it is in discussions with its advisers over the matter and the company continues to make further investigations into other possible instances of mismanagement by Lonrho.