THE Development Bank of Zambia has argued that as senior directors at the Zambian Airways, Nchima Nchito and Fred M’membe cannot claim innocence of the syndicated K14 billion loan between Mines Air Services Limited (trading as Zambian Airways) and the Bank.
This is after the Lusaka High Court dismissed an application to lift the corporate veil and join the two directors as party to the legal suit in pursuant of the K14 billion owed by the defunct Zambian Airways.
DBZ challenged the High Court ruling which suggested that Nchima and M’membe should not be added as those owing the Bank over a loan obtained to finance the operations of the airline.
“The court below erred in law and in fact when it failed to invoke the doctrine on piercing the veil of incorporation so as to justify the inclusion of Messrs Nchima Nchito and Fred M’membe as defendants to the action,” the bank said in its appeal.
The bank’s legal team from Messrs Elis and Company explained that the court below misdirected itself in law and in fact when it held that the two could not be included as parties with Mines Airways Limited and Zambian Airways Limited because they were not privy to the syndicated Loan Agreement.
In its appeal filed at the Supreme Court in Lusaka, DBZ charges that the two directors could not be separated from the loan obtained for the interest of the company they had t in, which qualified them as defendants on the matter.
The bank has also challenged the ruling citing its failure to allow to expunge the due diligence report from the defendant’s bundle of documents as requested in support of the plaintiff’s claims in the matter.
“The Court below erred both in law and in fact when it refused to expunge witness statements of Richard Phiri and James Bilias Kapesa on the basis of their contracts of employment with the Plaintiff,” it says.
High Court Justice Justine Chashi on December 15 2015 ruled against the expunging of witness statements from the defendants’ bundle of documents as well as to join Nchima and M’membe to the parties charged with failing to pay back K14 billion loan obtained by the redundant Zambian Airways.