SIMONGA Farms Limited has sued former Ministry of Defence permanent secretary Stardy Mwale over his alleged failure to pay US$530,000, which is the balance of the purchase price of part of its farm in Mazabuka.

Simonga Farms is also demanding, among other claims that Mwale pays back K39,624.60 which the company incurred in ZRA penalties under his watch and damages for loss of use and loss of income to the said farm.

According to a statement of claim filed in the Lusaka High Court, the company stated that Mwale purchased a subdivision of its farm, being Farm No. 132a, situated in Southern Province.

It explained that sometime around July, 2018, Mwale expressed interest to purchase the remaining extent of the said farm, consisting of a viable poultry farm which had an estimated income of K400,000 per month from the sale of the poultry produce.

The plaintiff stated that subsequently, the parties entered into a verbal agreement for the purchase of the remaining extent of the said farm as a going concern, at a total consideration price of the sum of US$550, 000.

“The plaintiff (Simonga Farms) will further state at trial that the purchase of the remaining extent was to be financed by the defendant in such a way that 50 percent of the purchase price [i.e USD 275, 000.00] was to come from a bank loan with First National Bank (FNB) and the balance from other sources. The plaintiff will additionally aver that at the defendant’s request and based on the defendant’s assurance to advance the payment once the loan was cleared, the plaintiff, acting through its directors and shareholders, Mike Arnold and Sue Arnold, agreed to allow the defendant to take possession and operations of the poultry farm section and also allowed the defendant to be a signatory on the plaintiff’s bank account with FNB so that he could continue the business, as the directors were relocating to Australia,” the claim read.

Simonga Farms stated that it was further agreed that Mwale would be left managing the company together with Regis Mada whereby the former was to be in control of the finances while the latter took the role of invoicing all egg sales, organizing procurement of stock feed and running the wages programme, which included National Pension Scheme Authority (NAPSA) contributions and Pay As You Earn (PAYE) for employees.

It stated that it was further agreed that once the defendant paid the consideration price in full, the shareholders of the company were to either transfer all the shares to him or, in the alternative to voluntarily liquidate the company.

“Furthermore, the plaintiff shall aver at trial that after taking possession of the farm, the defendant then begun to use the cash flow from the poultry section, and other facilities on the farm, as well as the plaintiff’s homestead. The defendant also began to use the dairy section of the farm as an abattoir and that as of 1st August, 2018, the defendant had full control of the operations of the farm, and the employees,” the claim read.

It stated that after the shareholders of the company relocated to Australia sometime in August 2018, they began to make several attempts to secure a payment for the said farm, but that all efforts proved futile.

“The plaintiff will aver that the defendant did not get a loan as promised. Neither did he advance any payment and in January, 2019, he promised to advance the sum of US$200,000 by February 14, 2019 and the sum of US$100,000 by February 28, 2019 towards the purchase price. In consequence of the promise to pay the total sum of US$300,000.00 by the February 28, 2019 by the defendant, the directors in the plaintiff company proceeded to make a deposit towards the purchase of the house in Australia on the understanding that the defendant would advance part of the payment for the farm, but no payment was made, leaving the directors of the plaintiff company in a very precarious situation,” read the claim further.

“The plaintiff will aver at trial that as at June 25, 2019, the defendant had communicated with the directors of the plaintiff company stating that he was going to borrow the sum of US$200,000 as part payment for the Simonga poultry section and further that withdrawals of US$5,000.00 per month would be made by the directors of the plaintiff from the farm account, which would be deducted from the purchase price, till the defendant paid the full purchase price. The plaintiff shall state at trial that it has to date only made deductions from the farm account the sum of US$20, 000.00.”

Simonga Farms further stated that poultry cages and other equipment were moved from the farm and taken to Mwale’s other farm on the Copperbelt, where he has continued to produce and sell eggs and has since stopped depositing money into the companies FNB account as promised.

It stated that despite several reminders, Mwale has denied and/or neglected to settle the amount due, an act amounting to breach of contract but had also continued to obtain income from the operations of the farm.

Simonga Farms further stated that Mwale used Simonga Farm to import goats from Namibia and the farm was penalized by Zambia Revenue Authority, in the sum of K39, 624.60 for not paying duty to which a Garnishee Order was subsequently placed on the Simonga Farms.

The farm is now seeking among other claims, payment of US$530,000, being the balance of the purchase price of part of Farm No. 132a, situated in the Southern Province; in the alternative, an order for possession of the farm, together with all the machinery and poultry equipment therein.

It also wants an order for repayment and/or to account all the income collected from the operation of the Farm since August 1, 2018; and an order for interim detention or preservation of equipment (poultry equipment) or any equipment thereon on Farm No. 132a.