Tycoon sues Central Bank

Tycoon sues Central Bank

MASERU – FORMER Maseru tycoon Arthur Majara is demanding M20 million from the Central Bank of Lesotho (CBL) for closing his Banca del Afrique Holdings (Pty) Ltd.

Majara says Banca del Afrique Holdings (Pty) Ltd suffered losses when it was closed by the Central Bank in September 2015. The Central Bank accused the company of conducting banking business without a licence.  Majara says this allegation was false because Banca del Afrique Holdings, which was registered in 2009, was not taking deposits from the public.

Instead, he says, it was licenced to conduct fund-raising activities by receiving “non-refundable contributions through MSISIDN (Mobile Subscriber Integrated Services Digital Network Number). In court papers Majara describes Banca del Afrique Holdings as “a duly authorised public communications service provider”. Majara claims that soon after that letter the Central Bank closed the company’s operations and activities.

The CBL appointed Advocate Chris Edeling to investigate Banca del Afrique Holdings’ alleged unlawful activities. Majara says Advocate Edeling has “long completed” his investigations but the Central Bank has not released a report of his findings. “This unjustified action by the Defendant still deters the Plaintiff from operating any business until the Defendant directs otherwise,” he says.

“Since the 29th September 2015 the Plaintiff incurred losses, present and future, resulting in Plaintiff suffering monetary damages for loss of business in the sum of R20 000 000.” He says the Central Bank has “failed or neglected” to pay Banca del Afrique Holdings “the said contractual amounts even after several demands”. He wants the High Court to order the Central Bank to pay R20 million plus an 18.5 percent annual interest and a 10 percent collection commission.

In its plea the Central Bank denies most of Majara’s allegations, including that it owes damages to Banca del Afrique Holding. The bank says it has no knowledge of the Banca del Afrique Holdings being a duly authorised public communications service provider”. It says Majara’s company is not entitled to any damages and insists that the company was conducting illegal banking business.

This, the central bank claims, was done by taking deposits without a banking licence. It also maintains that it acted “lawfully and on the basis of facts” when it closed the company. The bank denies that its action was unjustified and that it “deterred” the company from operating. “The Defendant avers that its actions were throughout lawful and went no further than what was in law required of it to put a stop to the unlawful activities of Banca del Afrique Holdings.”

Staff Reporter

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