President Sata should not be given any special conditions and rules in the conduct of the matter in which he has sued for defamation, Eric Silwamba, one of the lawyers representing Vincent Malambo, has said.
This followed an application for adjournment by lawyers representing President Sata in the matter in which he has sued Daily Nation’s Richard Sakala and Dr. Choolwe Beyani for defamation following the publication of a story that the President was shielding his friends from paying back K14billion from the Development Bank of Zambia.
The matter has since been adjourned to 20th June 2014 for Mr Malambo to join the defence.
It has since transpired that intense boardroom battles characterised the decision in which the Government attempted to withdraw the case in which the Development Bank of Zambia sued for the recovery of K14billion owed by the defunct Zambian Airways owned by Mutembo Nchito, the Director of Public Prosecutions, Fred M’membe the owner of Post Newspapers and Nchima Nchito.
Documentation deposed in court shows that there was panic in the DBZ Board when the Bank of Zambia questioned the decision by the DBZ to withdraw the matter from court.
The Bank of Zambia expressed serious concern at the DBZ’s purported decision noting that owing to the large amount of money involved and the fact that records showed the lending stood at K18billion and was in fact made in breach of Banking and Financial Services (Large Loan Exposure) Regulations; BOZ was concerned at the purported discontinuation of the court process.
It also noted that the K14billion which had mushroomed to K18billion led to significant regulatory capital deterioration when it became non-performing.
The Bank demanded a report on the proceedings on the matter and details of the circumstances that led to the decision to withdraw the matter, “Kindly attach relevant documents on the matter.” The bank demanded.
On receipt of the BOZ letter there was consternation in the DBZ Board because the decision to withdraw the matter had been at the instance of the Minister of Finance, Alexander Chikwanda.
Apparently when the initial instructions to stay the matter were given to Malambo and Company, the Bank was advised that it was too late to withdraw as the matter was too far advanced to be withdrawn. “Substantively, therefore unless the court stays the proceeding in the expected ruling on 19th aforesaid, the matter will proceed to final judgment on the merits of your claim. As the situation is presently, we are unaware of any rule of procedure available to us to carry out your instructions.” Malambo and Company wrote.
They added “You do however have an option to formally withdraw the whole case from us and instruct a lawyer whose knowledge of court procedure may enable him or her to stand down the matter at this very late stage.”
It was at this stage that the Board decided to dispense with the services of Malambo and appointed Buta Gondwe who accordingly entered notice of discontinuation which the Post Newspaper reported.
However, following the query from the Bank of Zambia and the fact that the DBZ could not offer any cogent explanation for the decision to withdraw, the Board reversed itself and re-appointed Malambo to continue with the matter to “its logical conclusion”. Buta Gondwe was removed from the case. Subsequently, Judge Nigel Mutuna passed judgment finding that the K14billion had been fraudulently obtained and ruled that Mutembo Nchito was culpable and therefore amenable to criminal prosecution.
Sometime in May 2012, the Zambian Airways Directors appealed to the Supreme Court against the decision of the Lusaka High Court.
Soon after the DBZ made some frantic efforts to change the lawyer representing the Bank and according to the DBZ Finance and Administration Committee, the efforts reached the highest level on June 4.
On June 5 the Deputy Minister of Finance then Miles Sampa visited the DBZ in a “sudden tour” and the following day on June 6 Mukutu the chairman of the committee of the board of DBZ wrote Malambo advising that; “We wish to advise that the Board of Directors that met to re-appoint yourselves to have conduct of this matter, have not at any time sat and resolved to withdraw such instructions. You are therefore, advised to disregard any purported withdrawal of the said instructions,” Mukutu wrote.
He wrote back seeking clarification of the instructions, which clarification only came on 22 June when a new Managing Director of DBZ Jacob Lushinga was appointed. He confirmed that Malambo was no longer DBZ lawyer.