SIDC WANTS E16M FROM NKONYENI FARM

MBABANE – The Swaziland Industrial Development Company (SIDC) wants Nkonyeni Farms (PTY) Ltd to be liquidated after it allegedly failed to repay its E16 million loan.

SIDC Chief Executive, Officer Nozi-khumbuzo Nxumalo said on February 16, 2009 the company (SIDC) represented by its then director, Tambo Gina, entered into a loan agreement with Nkonyeni Farm.
These are allegations contained in an affidavit whose veracity is still to be tested in court.

She said during the signing of the loan agreement, Nkonyeni Farm was represented by its Director Johan Jacob Rudolph III.
“In terms of the agreement, the applicant (SIDC) agreed to loan and advance the respondent (Nkonyeni Farm) a sum of E13 million at the latter’s special instance,” she stated.

Nxumalo informed the court that the express or tacit material terms of the agreement were inter alia that:  SIDC would loan Nkonyeni Farm a sum of E13 million to be used in its business. the loan would be paid in monthly instalments of E114 035 09 commencing from August 31, 2009 over a period of 114 months and that the interest rate payable on the loan would be a variable lending rate charged by Standard Bank.

She stated that as at the date of the signature of the loan agreement, the prevailing prime rate charged by Standard Bank was 13.5 per cent.
Nxumalo alleged that it was further agreed that the interest of the loan would be charged monthly commencing on February 28, 2009 and for the period up to July 31, 2009 and interest would be accrued and be capitalised as part of the loan.
The penalty interest, according to Nxumalo, was to be two percent

Loan

She further submitted that as security for the loan, it was agreed that Nkonyeni Farm would procure a first continuing covering mortgage bond for the sum of E13 million over an immovable property described as: certain Portion eight (a portion of portion four) of the farm Nkonyeni III No.523 situated in Manzini.
Nxumalo said as additional security Nkonyeni Farm also undertook to procure a first continuing covering mortgage bond for the sum of E6 million over an immovable property.

The immovable property was Portion 30 (a portion of portion 3) of Farm Nkonyeni III No. 523 situated in Manzini.
Nkonyeni Farm is alleged to have also undertaken to procure suretyships in terms of which its directors, namely Johan Jacob Rudolph III and Jacob Rudolph, bounded themselves as sureties and co- principal debtors with SIDC.

“In breach of the loan agreement, the respondent (Nkonyeni Farm) has failed to pay the monthly instalments of E114 035 09, on account and in reduction of its indebtedness to SIDC. The respondent has, since the loan was disbursed in February 2009, only managed to pay a sum of E322 872 87, leaving the total loan principal amount outstanding at E16 657 695 81, excluding interest,” submitted Nxumalo.
She alleged that as of February 28, 2014 the total loan amount standing was a total sum of E16 657 695 81.

Nxumalo submitted that as a result of the respondent’s failure to pay its instalment on the due date, the whole amount of over E16 million has remained due, owing and payable.
“In partial fulfilment of the terms of the loan agreement, the respondent on or about May 25, 2005 and July 31, 209 respectively and before the Registrar of Deeds, caused its duly authorised agents; Musa Leon Dlamini and Nana Angel Dlamini, to execute continuing covering mortgage bonds,” she stated.

She said Nkonyeni Farm declared itself to be truly and lawfully indebted to SIDC for the sum of E13 million and an additional sum of E1.3 million and an amount of E6 million.
“SIDC has complied with all its obligations towards Nkonyeni Farm in terms of the loan agreement and bonds. The respondent (Nkonyeni Farm), on the other hand, has failed to meet its obligations in terms of the loan agreement and in particular, with regard to the loan,” she stated.
The matter was yesterday before High Court Principal Judge Stanley Maphalala who reserved his judgment.

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