in Business & Finance

Zimbabwe government minister in legal battle over Rainbow Airlines

Posted 18 October 2017 · Add Comment

Zimbabwean Minister for Information Communication Technology, Supa Mandiwanzira, has been taken to court by a fellow shareholder of local start-up carrier Rainbow Airlines citing breach of contract, reports ch-aviation.

Frank Humbe, through his firm, Day Investments, has issued summons against the minister's company, AB Communications, together with Rainbow Airlines.

Humbe said in his declaration that he had entered into an agreement with Mandiwanzira with the aim of launching Rainbow Airlines.

However, when this failed, Humbe said he concluded a concluded a sale agreement with Mandiwanzira in respect of his 700 shares in Rainbow Airlines, which constitute 70% of the airline’s issued share capital.

Mandiwanzira, through his AB Communications vehicle, was to have paid Humbe, through Day Investments, USD355,419.43. However, when Mandiwanzira failed to make the payment by on February 12, 2017, Humbe cancelled the deal. Humbe added that in subsequent discussions, Mandiwanzira’s firm made a compromise offer for the same shares, offering to pay off the full amount in monthly installments of USD10,000.

“In breach of the compromise agreement, first defendant has failed, refused and/or neglected to either pay the agreed installments or liquidate the sum in full ... The first defendant has on the basis of the agreement whose terms it has not complied with taken its position in second defendant and is now solely running that entity,” Humbe said.

AB Communications has since countered Humbe's claims stating that the talks concerning the installment plan were without prejudice and that no binding consensus was ever reached on the matter.

“The defendants further aver that the parties were and still are to reach consensus on the terms of payment as discussions are underway and have not yet yielded any binding terms. Plaintiffs are, therefore, put to the strictest proof of the alleged binding compromise.”

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