eBusiness Weekly
Martin Kadzere
WestPro Holdings has released additional disclosures ahead of its listing on the Victoria Falls Stock Exchange ((VEFX) scheduled for tomorrow after the Securities Commission of Zimbabwe (SecZim) directed the company to publish a supplementary report on its pending court cases that had not been included in the prospectus.
This followed the complaints registered by some parties who are suing companies related to WestPro and its directors that the property firm had not made full disclosures in conformity with the listing laws. WestPro listing on the US dollar-denominated bourse came under the spotlight after it emerged the company might have misled the public by not making sufficient disclosures in its prospectus.
The company has however denied any wrong doing.
The complainants are alleging that WestProp did not make full disclosures of litigation against the firm, which may affect the value of its shares in breach of sections 97 and 114 of the Securities and Exchange Act (Chapter 24:25). SecZim, the regulator of the capital markets wrote to the VEFX and WestProp to file their presentations.
WestProp responded through their lawyers Scanlen and Holderness and the complainants also submitted a response to WestProp submissions and filed further correspondence between themselves and WestProp lawyers on Thursday last week.
After reviewing the presentations from all parties, SecZim resolved the pending legal cases lodged by the complainants ought to have been included in the prospectus.
“It is in the interest of the investing public that WestPro published a supplementary prospectus to enable investors to make informed decisions,” SecZim chief executive Anymore Taruvinga wrote to VEFX on Wednesday. “The VEFX is hereby directed to ensure WestPro publishes a supplementary litigation report…before the listing.”
Pending court cases
Business Weekly can report that there are two companies that have pending monetary claims running into millions of dollars against companies related to WestPro.
A Harare businessman, George Katsimberis has two claims against the promoters of the listing namely US$10 million in damages arising out of the destruction of a show house that had been built at Pekugara Estates, which is one of the pieces of land presented in WestPro Holdings prospectus as an asset of the company.
WestPro argues that the demolition was done pursuant to the order by the City of Harare because the structure was illegal. It further argues Katsimberis produced what purported to be approvals by the local authority but “No signatory of the documents could be found…and is facing criminal charges for the production of the document.”
In addition, there is another US$20 million claim for damages allegedly suffered by Katsimberis as a result of the alleged fraudulent misrepresentation of and cancellation of a joint venture project for the development of Pokugara Estates by the listing promoters. Katsimberis has filed three court cases, which are all pending before the commercial court. The cases had not been disclosed in the prospectus.
However, WestPro asserts the joint venture was terminated and that the party cited as Katsimberis partner did not exist. “In any event, Katsimberis failed to perform his obligation.”
Fairclot Investments Limited, trading as Trucking and Construction alleges to be owed about US$5 million inclusive of interests and costs arising from unpaid judgment debt against the promoters of WestPro listing. The debt is alleged to be secured by stand 649 Pomona Township, which promoters of the listing have presented as theirs.
The title of the deed is alleged to be held in escrow by a law firm on behalf of Fairclot.
“The promoters of WestPro Holdings by way of misrepresentation obtained duplicate title deeds which they have used to transfer the property (stand 654 Pomona) into another company called Doorex which presented in the prospectus as the registered owner,” Fairclot argues.
“The promoters of WestPro have misrepresented that the judgment debt against them was paid in full and with the connivance of a sheriff who is currently under suspension caused the upliftment of the warrant of execution against stand 654 Pomona and immediately transferred the property into a company called Doorex,” Fairclot adds
Fairclot is challenging the uplifting of the warrant of execution against the property as well as its transfer to Doorex. Fairclot’s challenge is based on that the judgment debt owed to it by Augur Investments was not settled in full. The challenge by Fairclot and counter-arguments by Augur and other promoters of the listing before the High Court. The matter was argued in 2022 and the judgment was reserved.
However, WestPro holds that the debt was fully paid in Zimbabwean dollars after it was converted from US dollars following the promulgation of Statutory Instrument 33 of 2019. It argues the sheriff was right in lifting the property from the attachment.
Fairclot also filed another matter, which is an interdict application to stop the disposal of stands from 654 Pomona pending the conclusion of the matter and the judgment has been reserved. The interdict application is pending a hearing and has been set down on May 11 for arguments before Justice Siyabonga Musithu.
The listing of WestPro would help the company to finance six projects; Pokugara Residential Estate, Millennium Heights, Pomona City, The Mall of Zimbabwe, Millennium Heights Office Park, and the Warren Hills Golf Estate, according to the company.
