The Zambia National Farmers’ Union (ZNFU) has sued the Livestock Services Corporative Society seeking the closure of Lizara Investments Ltd, a special purpose vehicle that has been taking care of ZNFU’s 4% shares in the Zambia National Commercial Bank since 2008.
Dr Evelyn Nguleka, suing in her capacity as ZNFU president, demands that Lizara Investments must be wound up by the court so that Rabo Financial Institutions Development BV of Netherlands can effect the transfer of the Zanaco shares held by Lizara to ZNFU.
Apparently, there’s disagreement between ZNFU and Livestock Services over the continued existence of Lizara. It is alleged that directors at Livestock Services are determined to hold on to, and benefit from, shares meant for the entire Zambian farming community. It’s also alleged that the directors at Livestock have been orchestrating a crusade to have ZNFU executive Ndambo Ndambo removed, as he has been instrumental in guiding the ZNFU board and management on Lizara issues.
When Rabo Financial Institutions Development BV bought 51% shares in ZANACO, the Dutch firm offered close to 4% shares in the bank to the Zambian farming community through ZNFU. At that time, ZNFU did not have US$700,000 that was required to purchase the shares and subsequently acquired the loan from Livestock Services, which was to be repaid from dividends from Zanaco.
In that respect, Lizara Investments was created in October 2008 as a special purpose vehicle to hold the 4% shares in escrow for ZNFU who in turn hold it for the benefit of the Zambian farming community. Lizara would then be dissolved when full payments were made by ZNFU to Livestock Services.
In a petition submitted before the High Court by ZNFU lawyers Eric Silwamba, Jalasi and Linyama Legal Practitioners, the Union argues that the members of Lizara (ZNFU and Livestock Services) cannot agree on the mandate and future of Lizara despite ZNFU having liquidating the loan and interest in full.
“Livestock Services is resisting the dissolution of Lizara despite being fully paid for the loan and therefore discharged all its obligations,” the petition states.
The petition states that in the meantime, Rabo Financial Institutions Development BV maintains that it can only effect the transfer of the shares to ZNFU if there’s a unanimous resolution by ZNFU and Livestock Services, hence the dispute.
“In the circumstances, it is just and equitable that Lizara should be wound up and 4% shares in Zanaco (now valued at approximately K61 million) be transferred by the liquidator to ZNFU,” the petition reads.
The court has since granted ZNFU leave for the appointment of a provisional liquidator who has taken over the powers of the Lizara board and management until the court has heard and determined the matter.
The matter comes up on March 21.