Durban - A Durban businessman’s bid to dispute a R20 million debt to First National Bank (FNB) was turned down at the Durban High Court, but he has vowed to fight on.
Mohamed Abdoola, owner of Check One Supermarkets, a string of supermarkets across the country formerly known as Checkout, was under business rescue.
Abdoola has claimed that FNB has overcharged him interest amounting to millions of rand over the years which resulted in the downfall of the legacy business. He had been banking with FNB since in 1976.
FNB took Abdoola to court and in court papers claimed that it had granted him, the principal debtor, a short-term direct working capital facility of R86m which was repayable on demand in 2017.
It also added R20m asset finance, through the Wesbank facility, and R1.5m in contingent guarantees.
The bank initially instituted liquidation against Abdoola’s business which he opposed and instead launched a business rescue application.
However, the bank stated that a suretyship, limited to R20m, was concluded with Abdoola and therefore he was indebted to the bank.
“The amount recoverable from Adboola would be limited to R20m plus interest and all attorney and own client costs including value-added tax incurred in legal steps against the principal debtor and all costs for the recovery of everything,” said FNB in court papers.
It added that there was a breach of agreements between the two parties and various meetings and discussions took place but have failed.
In his reply, Abdoola accused the bank of setting him up.
He said in weighing the needs of his business, he agreed to sign a personal surety to a limit of R20m, on the basis that the FNB would provide his business with additional working capital facilities up to R86m.
He said the facility would only be approved by the bank with his surety included and that he had no other choice but to sign the suretyship for the additional facilities.
“Clearly, I had no choice. The facilities I had before I signed the personal surety were now at risk of being cancelled. I signed under undue influence or duress to save the business. I was in a position of stress and hopelessness.
“If I refused to sign the surety, then the business would be destroyed. I had no choice, I was forced to sign it, believing I was given a facility of R86m for working capital,” claimed Abdoola.
He said he had also hoped that the bank would register a bond of R15m over the freehold property of his business in Cape Town,” he said.
Last week Sunday, Abdool made a counter application to the court ahead of its hearing on Wednesday.
In his application, he claimed that there were discrepancies in the 44 year-old account he has with FNB.
He said an independent auditor examined the statement and wanted to highlight the findings in court, but the application was dismissed.
“There is clear evidence that interest charged by FNB was incorrect and exorbitant,” he said.
Abdoola said that he submitted statements that showed different interest rates as evidence. He wanted the court to direct FNB to debate the account since inception to recalculate the interest they have been charging.
“If I am correct, in respect of the interest alone, then on the overcharging of interest, which I submit, it is clear the bank was an architect and designer of the downfall of my business,” he said on the application.
However, the court ordered Abdoola to pay the R20m plus interest on last week.
Abdoola said he was working on the appeal with his lawyers as he believed that the court did not get an opportunity to hear his new evidence.
siboniso.mngadi@inl.co.za
SUNDAY TRIBUNE