PRESTIGE Motors Limited has claimed in the Lusaka High Court that it was swindled out of US$8 million dollars which was part of an award to it in a tax dispute awarded in 2019.
Prestige Motors had dragged ZRA to court after the commission refused to acknowledge a tax rebate that was given to the company for the importation of trucks in complete knockdown form and set for assembly in the country.
Judge Mwila Chitabo awarded damages for losses to Prestige motors in the matter.
The parties then agreed to settle for US$16 million dollars to be paid in damages after rigorous negotiations with ZRA.
But after payment of the first installment in early October 2019, former ZRA Director General Kingsley Chanda and Shawki Fawaz started a court action in the Kitwe High Court in which a default judgement was entered and a garnishee order issued to them through Lunga Resources Limited and Tunta Mining Limited in November of the same year.
But According to the affidavit in support of summons to set aside garnishee order absolute filed last week, Daphne Gray, operations manager at Prestige Motors swore that the two companies commenced an action against Prestige Motors demanding payment of US$2,454,218.67 and US$5,938,454.14 respectively.
Gray stated that the two companies alleged that they were contracted by Prestige Motors in 2014 to build a truck assembly plant when in fact not.
She alleged that the entire statement of claim and writ of summons was based on a story that is totally fabricated and false and added that the whole action was premeditated and planned to defraud the ZRA and Prestige Motors of funds legally due to them.
Gray stated that her company was never served with any documents whatsoever in the action and the stamp and signature purporting to acknowledge service were forged.
“In the affidavit of service deposed by a named Dominic Mwanza allege that on October 11, 2019, an attempt was made to serve court process on the defendant at its Ndola Factory and that someone purportedly received the documents but refused to sign. I respectfully refer to the court record and wish to set the record straight and that at no time has the defendant owned a workshop in Ndola,” she stated.
Gray stated that the court proceeded to enter judgement in default against Prestige Motors based on the affidavit of service which is based on falsehoods as Fawaz, who was Lunga Resources director, shared a house with Prestige Motors director Dovan Gray but neglected to serve the court process in a bid to defraud the company.
She told the court that the defendant company made several follow ups with regards to the remaining balance due to them in the sum of US$8 million with ZRA and it failed, neglected and/or refused to inform them or its legal counsel about the proceedings.
The company stated that the defendant company was only advised about the proceedings by ZRA after a change in government following the August 12 election results which points to the fact that certain officers at ZRA and the plaintiffs worked together to defraud the ZRA and the defendant.
“That the defendant company has never entered into any transaction with the plaintiffs as purported by the plaintiff in the pleadings herein or otherwise and the whole action is based on fraud. That the prospects of success of the application to set aside the judgement in default are high as the defendant has a meritorious defence for the reasons advanced in this affidavit and as can be adduced from the proposed defence and counterclaim,” Gray stated.
She further stated that the plaintiff companies were aware that ZRA was owing Prestige Motors a sum of US$8 million under cause 2014/HP/327 and they used the information to connive with officials at ZRA to commence the secret and fraudulent action to swindle ZRA and the defendant.
Gray added that the said balance was supposed to be paid by the end of November 2019 but still hasn’t been paid despite various reminders.
In their counterclaim, Prestige Motors have stated that they will prove at trial that Chanda and Fawaz connived and commenced the fraudulent action and the ensuing garnishee proceedings in order to swindle the defendant of a sum of US$8 million without serving the defendant with any court process.
They further stated that the plaintiffs and the ZRA commissioner general connived and swindled the defendant out of a sum of US$8 million by having the amount paid out by way of a fraudulently obtained garnishee order.
They are further claiming immediate payment of the US$8 million, being the money owed to the defendant by the plaintiffs and damages for consequential loss and damage suffered by the defendant arising from the wrongful actions of the plaintiffs and the ZRA.
They are also seeking interest on all amounts adjudged to be payable to the defendant, any relief the court may deem fit and costs.
The company have however told the court that they have also written to the Inspector general of police to report the alleged fraud.