Spiritage Zimbabwe Limited is suing AfrAsia Bank for a sizable chunk of their weight in gold, $79 million to be exact. This is according to a report published in the Herald that spells out in detail the financial mess that they are blaming for their downfall.
The applicants (Valley Technologies, Zach Wazara and Spiritage Zimbabwe) are seeking redress for loss in the value of Valley Technologies, damages from the breach of the bank’s obligations and the defamation of Wazara and his businesses on allegations of a misappropriation of $4.7 million.
The last time there was any mention of Spiritage Zimbabwe, Valley Technologies or Wazara in the media, the story played out like an obituary for a failed venture and the general consensus from observers was that we had just seen another case of mismanagement. Wazara and Spiritage are out to prove otherwise in this lawsuit.
According to the Herald report, the lawsuit brought by Spiritage accuses AfrAsia of fraudulent activities that involved converting funds received from African Export Import bank for its own use. These funds, amounting to $10 million, were part of a loan facility released by Afreximbank for Spiritage’s Valley Technologies.
It then alleged that AfrAsia diverted $3.2 million of that fund to Tetrad Investment before borrowing the same money through a “round tripping” arrangement. Valley Technologies was denied access to the full amount under the false impression that there was a Central Bank limit to the funds before being exposed to a more expensive loan through NSSA.
Valley Technologies and related companies allege that these fraudulent activities left them financially and operationally hamstrung, creating a string of challenges. This resulted in their failure to honour a $21 million loan which was settled by the seizure of its telecoms equipment by AfrAsia Bank.
Granted, there were some operational hiccups at Spiritage but if these allegations are substantiated, then this is a very nasty case of corporate misgovernance that sucks in a lot of big players. It sadly left a tech startup firm in the dust and deprived the local telecoms sector of another competitor.