Controversial businessman Wicknell Chivayo’s woes continue to mount after he was dragged to the High Court on Tuesday for failing to pay for shares he bought in a local company.
According to court papers filed earlier this week, the first and second applicants in the matter are Chisholome Road Freeholder (Private) Limited and Five Chisholome Road Cluster One (Private) Limited, respectively.
The applicants are claiming $650 000 from the businessman, who is currently under pressure to clear his name over a string of multi-million dollar energy deals entered between him and the Zimbabwe Power Company (ZPC) — a unit of power utility Zesa Holdings.
“In March 2016, the first plaintiff entered into an agreement with the defendant (Chivayo) in terms of which the defendant purchased certain shareholding in the second plaintiff together with certain loan accounts.
“The effect of the agreement between the parties was to make the defendant the beneficial owner of an immovable property known as number 1 Rikitayo Villas, number 5 Chisholome Road, Ballantyne Park, Harare,” the court heard.
In terms of the agreement, the purchase price for the shareholding was $850 000 which required of $100 000, paid by the date of agreement.
A further $250 000 was payable on or before April 8, 2016 and the remaining $500 000 was to be paid by end of August 2016.
According to the court papers, in the event Chivayo failed to pay the full purchase price by end of August 2016, the agreement of sale would be increased by the sum of $150 000 for each period of 90 days.
“In breach of the agreement, the defendant failed to pay the full purchase price by 31st August 2016, and to date he had failed to pay the outstanding balance on the purchase price which is in the sum of $500 000.
“As a consequence of the breach, defendant has caused the 1st plaintiff to suffer contractual damages arising from the loss of value of money, which it was contemplated by the parties that the sum of $150 000 for every period of 90 days or part thereof would compensate.
“Despite demand to pay the outstanding balance of the purchase price and the damages for loss of value of money, defendant has failed or neglected to pay the same, and has instead sued the plaintiffs under case number HC6272/17 for an order in terms of Section 4 (2) of the Contractual Penalties Act (Chapter 8:04) seeking for reduction of the damages for loss of value for money for every period of 90 days that he remains in default or part thereof,” the court heard.
The litigants are now demanding payment of the purchase price and a further $150 000, which is the pre-estimated damage for the loss of value of money in respect of each period of 90 days, with effect from November 30, 2016 until the date of payment of the full purchase price.
Chivayo has not yet responded to the summons.
The businessman, known for flaunting and bragging about his wealth on social media, has been fighting to clear his name in the wake of corruption-related allegations surrounding his mega deals with ZPC.
An elite investigating unit, the National Economic Conduct Inspectorate (NECI) is currently digging into contracts between ZPC and Chivayo’s company, Intratrek Zimbabwe (Private) Limited.
NECI recently ordered the businessman to submit his bank statements, contract documents and cash books as part of widening investigations into the ZPC deals.
Chivayo’s deals have been marred in controversy following a $5 million pay-out to his company to work on a 100-megawatt Gwanda solar plant in a $200 million tender.
Apart from the Gwanda project, Chivayo was also awarded a further $73 million for the refurbishment of the Harare Power Station, $163 million for the restoration of the Munyati Power Station, and $248 million for the Gairezi Power project.
Chivayo’s projects have attracted a lot of attention, including from Members of Parliament.
The parliamentary portfolio committee on Mines and Energy has been putting pressure on government to implement the moribund Gwanda solar energy project.