Zim seeking out-of-court settlement with German bank

HARARE - Zimbabwe is allegedly considering an out-of-court settlement with German bank KfW Bankengruppe which is owed 40 million borrowed more than 12 years ago to rehabilitate the troubled Zimbabwe Iron and Steel Company (Ziscosteel).

Commercial Farmers Union (CFU) Vice President Louis Fick, who is also leading a group of South African nationals in a legal battle to force the Zimbabwean government to compensate them for land expropriated during the past decade, said the KfW Bankengruppe settlement would be announced on October 8 when the case comes up at the North Gauteng High Court.

“The Zimbabwean government has decided to go for a settlement with the German bank KFW Gruppe and offered to repay the 40m Euros,” Fick said last week. The North Gauteng High Court in July postponed the auction of several properties in South Africa owned by the Zimbabwean government, which had been seized to pay back loans from the German bank as well as compensate a group of South African farmers who lost their farms under President Robert Mugabes controversial land reform programme.

Seven properties in South Africas Western Cape and Gauteng provinces were seized by KfW Bankengruppe in May over Harares failure to settle a multi-million dollar loan. The government, through the Zimbabwe Iron and Steel Company (Zisco), entered into the loan agreement with the German bank in January 1998.

Repayment of the loan was then meant to be done in 16 instalments starting from May 2000. But after only four payments, the last being in 2002, Zisco stopped paying, leaving the German bank with no other option than seek other means of repayment. Attorney General Johannes Tomana could not be reached for comment but a senior official in his office could neither confirm nor deny the plans to settle with KfW.

The settlement with KfW Bankengruppe could create opportunities for the South African farmers who are also seeking compensation from the Harare regime for farms expropriated by Mugabe. Our legal team is strategizing on our way forward with this in mind, Fick said last week.

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