Zameer Karim of Pioneer Investments Limited has once more been dragged to court for allegedly failing to settle a bank loan amounting to K850 million obtained from Ecobank (Malawi) Limited.
The bank has also sued Karim’s firm, Oil and Protein Company Limited (loan beneficiary) and Attorney General (AG) on behalf of the Malawi Police Service (MPS).
Ecobank is claiming the K850 million as principal amount due and payable under the loan facility and K150 million being principal amount availed to the oil company and secured through an undertaking by the MPS to pay proceeds owed to Karim.
Further, the bank is claiming contractual interest as it continues to accrue on both K850 million and K150 million at the rate of the bank’s base lending rate effective August 2014 and February 26 2016, respectively, until full payment.
According to the summons of a commercial case number 269 of 2018 filed on August 17 2018, Karim, the oil company and AG, have been given 28 days to either satisfy the claim or file with the court a defence.
“If you do not intend to contest the proceedings you must, within 14 days after the service of this summons on you inclusive of the day of the service, return the accompanying response stating therein that you do not intend to contest the proceedings but desire a stay of enforcement of judgement, if any,” reads part of the summons.
According to a statement of case, Karim through his oil company, got from the bank K850 million loan under a short-term agreement to be used to meet working capital requirements. The facility was for a 12-month period.
However, according to the court documents, the borrower failed to repay the facility within the agreed 12 months and in August 2015 Karim wrote the bank requesting for the restructuring of his oil company facility for a further period of 12 months.
On February 26 2016, Karim and his company requested from the bank K150 million in form of an overdraft to meet working capital needs and was valid for a period of three months. The facility was secured by, among others, assigned proceeds expected from MPS amounting to K2.79 billion.
MPS had earlier undertaken to make payment directly to the bank, but instead paid the said money directly to Karim, which was a breach of the facility agreement.
“The 1st defendant [Oil and Protein Company] has over the years willfully and negligently defaulted payment of the said sum and interest thereon,” reads the document.
Karim was not available yesterday when contacted as he was reported to be travelling but lawyer representing the bank Chikaiko Machika declined to comment on the matter, saying he was not in a position to do so.
Karim and his Pioneer Investment Limited came on the spotlight in June this year after an Anti-Corruption Bureau (ACB) probe suggested that it was involved in a dubious food ration contract with MPS amounting to K2.79 million and that part of the proceeds were deposited in a Democratic Progressive Party (DPP) account whose sole signatory is President Peter Mutharika.
In the deal, Pioneer also got a loan from CDH Bank and the police also undertook to remit some money direct to the bank to recover the loan facility. n