Erwin Rommel
JF-Expert Member
- Dec 1, 2013
- 429
- 116
The Independent Power Tanzania Limited (IPTL) plant in Tegeta, Dar es Salaam.
Dar es Salaam. Malaysian joint liquidators are suing Mr Harbinder Singh Sethi-the man who claims he bought 70 per cent majority share of Independent Power Tanzania Ltd (IPTL)-on allegations that the Kenyan tycoon fraudulently and falsely purchased the shares.
The liquidators through their lawyers, Rugambwa Pesha and Charles Rwechungura of CRB Africa Legal, yesterday filed a commercial case, No 105/2014, at High Court Commercial Division, in which they describe as illegal Mr Sethi's purchase of the said IPTL's shares that were earlier owned by Mechmar Berhand Corporation.
Mr Sethi is the first defendant, while PAP is the second and IPTL is the third.
The plaintiffs claim: "By the plain and natural meaning of the correspondence referred to above, the 1st defendant and the 2nd defendant at the time of its incorporation, and each of them were expressly aware and in the alternative constructively and impliedly aware, that the 1st defendant was fraudulently and without colour or right misrepresenting to be the Agent of the Plaintiffs and was told so expressly including in the words that that Mr Harbinder Sethi Singh is neither a Director of Mechmar nor an officer and or authorized representative by Mechmar to act for matters related to IPTL, but the 1st Defendant and 2nd Defendant went ahead and purported to buy back shares from Piper Link Investments Limited (Piper Link) on behalf of Mechmar and to transfer the shares from Mechmar to Pan African Power Solutions Ltd."
The Malaysians further claim that signing documents presented at Business Regulatory and Licensing Authority (BRELA) and Tanzania Revenue Authority (TRA) to justify Mr Sethi's claims that he bought 70 per cent share of Mechmar was legally improper.
"The signing of documents presented to Brela and TRA purporting to have been written by Mechmar as a shareholder in IPTL including the Deed of Transfer of Shares from Piper Link Investments Ltd was clearly a forgery because the 1st Defendant and the 2nd Defendant, were aware that neither the Joint Liquidators nor lawful attorneys of Mechmar..."
According to documents presented by Mr Sethi to Brela and TRA, Piper Link Investments Ltd bought 70 per cent Mechmar's share within IPTL at the cost of a mere Sh6 million in September, 2013 and three weeks later, the purported buyer sold those share to PAP for $300,000 (Sh500 million).
However, 30 per cent of IPTL's shares, which were owned by VIP Engineering and Marketing were bought by Mr Sethi at the price of $75 million.
The plaintiffs claim that neither PAP nor Piper Link Investment have the share certificate to prove the ownership of the 70 per cent share of IPTL because the original title documents to shares as the Share certificates evidencing the ownership of the 70 per cent shares of Mechmar had been ordered released to Standard Chartered Bank (Hong Kong) Ltd by the High Court in British Virgin Island in 2010.
That being the fact, claims the liquidators, Piper Link had neither legal ownership nor possessory interest in the share certificates for the shares which were purportedly transferred to PAP after the latter allegedly paid $300,000. "On or about 9th September 2013 the 1st Defendant, purporting to act for Mechmar, prepared and signed a share transfer deed to sell and transfer 7 shares in the 3rd Defendant (IPTL) to the 2nd Defendant for a par consideration of TZS 5,000 per share. The 1st Defendant subsequently submitted the said Instrument to TRA for assessment of Capital Gains Tax and Stamp Duty incidental on effecting transfer in the Register of Members at the Companies Registry.
"Attached hereto (before the court) are Tanzania Revenue Authority letters both with even reference of TRA/DR/LA/RE/175 and even date of 15th November 2013 being tax assessments of two transactions from Mechmar to Piper Link Investment Ltd and from Piper Link Investment Limited to the 2nd Defendant whereby taxable values were uplifted to TZS6,000,000 and USD 300,000 and was assessed Capital Gains Tax of TZS596,000 and stamp duty of TZS180,000 and Capital Gains Tax of TZS 47,940,000 and stamp Duty of TZS 4,800,000 respectively."
The plaintiffs also claim that by virtue of the contents of documents presented by Mr Sethi to both Brela and TRA, the transfer of Mechmar 70 per cent shares was irregular and didn't meet the requirements of Section 77 of the Companies Act.
They further claim that there was an earlier attempt by Piper Link Investments Ltd to purchase 70 per cent IPTL shares owned by Mechmar through a share sale agreement dated September 9, 2010, which, among other things, was clouded by fraud and the effectuation of the transfer was pre-empted by an injunction in the British Virgin Islands-the country, where Piper Link was incorporated.
The British Virgin Island High Court of Justice, through Claim No. BVIH COM 2010/147, issued a freezing order preventing any transfer of IPTL share owned by Mechmar. On April 11, 2011, according to evidence attached by the plaintiff, Piper Link was ordered by the British Virgin Island court to surrender the share certificates.
The plaintiffs pray for judgment and decree against the First and Second Defendants is as follows:
(i)A declaration that the deletion of the name of Mechmar Corporation (Malaysia) Berhad from the register of members as 70 per cent shareholder and entry of, and vesting title into, the 2nd defendant in the 3rd defendant company was unlawful and irregular; as alleged in paragraph 11(i); (ii)An order directing the Registrar of Companies to rectify the entries in the register of the 3rd Defendant by deleting the name of the 2nd Defendant..;
(iii)Payment of general damages for the discomfort, pain, suffering anxiety...n filing this suit; to be assessed by this Honourable Court..;
(iv)Specific damages arising out of wanton dissipation of the assets of the 3rd defendant by the unlawful acts of the 1st and 2nd defendant.
Source:thecitizen
