The Supreme Court of Appeal Tuesday heard submissions from renowned lawyer Khuze Kapeta, who was found guilty of failing to account for over $4.2 million (about K3.2 billion at K750 to the US$) for the liquidated Finance Bank of Malawi (FBM).
Kapeta is appealing against a High Court judgment delivered on October 31, 2013 that ordered him to pay back unaccounted Finance Bank of Malawi money and properties valued over U$4.2 million.
His lawyer Justin Dzonzi told a panel of three Supreme Court of Appeal judges, Rezine Mzikamanda, Lovemore Chikopa and Anaclet Chipeta that the lower court erred in its judgment because it used originating summons which were brought before it unprocedurally.
“[In] the second ground, we are simply concentrating on the actual amounts of money that was awarded and showing that the court erred,” said Dzonzi.
He argued that his client did not receive U$4.2 million, instead he claimed that the money that his client had was just K3 million.
“Much o f that money [U$4.2 million] was actually an outstanding loan which has not yet been recovered. This money is still with the debtors of Finance Bank [of Malawi]. If the court says that Mr. Kapeta should pay, in essence it is as if he has become the primary debtor…when the money is supposed to be collected by the new liquidator,” he explained.
According to Dzonzi, his client was not able to “fully defend himself because of his state of health, hence [High Court Judge Ken Manda made] a judgment in 2013, compelling him to pay Finance Bank K1.9 billion plus interest of two percent.”
Because of being unsatisfied with the judgment, Kapeta appealed against that judgment, arguing that the originating summons were procedurally wrong, leading the court to give a judgment which could not have been arrived at if the right procedure had been followed.
In his submission, lawyer representing the bank, Chikosya Silungwe, argued that under the Company Act, a liquidator is required to account for money and property under him.
Silungwe argued that Kapeta accepted the damages because: “the amounts mentioned were never disputed in the lower court.
“The appellant knew what case he was facing for taking the mortgage for person use. Coming to appeal today is an abuse of the court processes and the appeal itself lacks merit so it should be thrown away.”
He said Kapeta was given four months to repay the money but he has not done so up to date.
The genesis of the court battle began in 2005 after the Reserve Bank of Malawi (RBM) closed Finance Bank of Malawi following concerns over foreign-exchange dealings.
In 2006 RBM appointed lawyer Khuze Kapeta as liquidator until 2010 when he relinquished his position after seriously falling sick.
In 2011, Pempho Likongwe was appointed liquidator to replace Kapeta, a development that necessitated that Kapeta should hand over notes to the new liquidator when he was not yet fully recovered.
That process eventually led to problems of provision of information to the new liquidator which essentially led counsel Likongwe to take court action against Kapeta to give an account of the liquidation suspected to have been defrauded.
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