FORMER Ministry of Defence permanent secretary Stardy Mwale who was sued by Simonga Farms Limited over US$530,000 balance on farm purchase, has argued that he was unable to get a loan to pay for the same because the farm owners refused to release the certificates of title.

Mwale has told the Lusaka High Court that since the owners of Simonga farms failed to produce the certificates of title to be used as collateral for the loan, he was unable to get the loan from the bank making it impossible for him to pay for the said farm.

This is a matter in which Simonga Farms Limited has sued Mwale over his 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.

But in his defence filed in Court, recently, Mwale stated that he only purchased a subdivision of Farm No. 132a, situated in Southern Province and not the entire Farm.

“The defendant will aver at trial that he did not express any interest to purchase the remaining extent of the said farm to the plaintiff. However, it was the plaintiff’s directors that asked him to purchase the remaining extent as they had failed to find a buyer,” Mwale stated.

He said he had entered into a verbal agreement with the Farm owners and he agreed to get a loan to pay for it but was unable to because the owners refused to release the certificate of title for the subdivision that he had purchased and/or even the Certificate of title for the remaining extent that the farm owners were trying to sell to him.

Mwale added that since the owners of Simonga farms failed to produce the certificates of title to be used as collateral for the loan, he was unable to get the loan from the bank making it impossible for him to pay for the said farm.

He further stated that since the directors, Mike Arnold and Sue Arnold, were permanently leaving Zambia, and they desperately needed to sale the remaining extent of the farm, they asked him to take possession and operations of the poultry section and also allowed him to be a signatory on the farms account.

Mwale said it was agreed that as he was managing the poultry section of the farm, income from the said farm was to be deposited into the farm’s First National Bank account and the directors were to be withdrawing a certain amount of money once every week and the rest of the money was to be used for NAPSA and employee’s salaries.

He stated that the directors did not keep their part of the agreements and started making weekly withdraws from the said account but further noted that he was prompted to stop making deposits after the directors started making daily withdraws as they had withdrawn more than US$20,000 from the said account.

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.

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.

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, organising 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.

The plaintiff stated that it was also 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.

The plaintiff also 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.

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.

The plaintiff 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.