Zimbabwe: Fidelity hires outside lawyers for Langford estates dispute
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LISTED insurance group, Fidelity Life Assurance (FLA) has engaged outside legal services for representation in the Langford Estates ownership dispute.
The dispute arose after FLA entered into a share sale agreement with CFI Holdings Limited (CFI) acquiring 80.77% of the shares of Langford Estates, a company whose sole asset is 834 hectares of land.
The purchase involved the assumption of CFI Holdings Limited’s US$16 million debt owed to a consortium of banks by the company.
Subsequently, a debt assumption and compromise agreement was signed between creditors of Fidelity and CFI Holdings, including Agrifoods, and FBC Bank Limited, Agricultural Bank of Zimbabwe Limited, Infrastructure Development Bank of Zimbabwe Limited, Standard Chartered Bank Zimbabwe Limited and CBZ Bank Limited.
Subsequently, Fidelity assumed CFI’s debt and 80.77% ownership of Langford Estates and duly repaid the debt.
In March 2018, the company received a letter from CFI contesting the Share Transfer Agreement and the Debt Recovery and Compromise Agreement.
“As the parties failed to find an amicable solution, CFI sued the Company before the Tribunal de Grande Instance and Arbitration respectively for cancellation of the debt assumption contract and for cancellation of the share transfer contract.
“Both matters are pending resolution in both forums. The administrators have engaged outside legal counsel to represent the interests of Fidelity Life,” the company said in a recent update.
Meanwhile, Fidelity managed to post an after-tax profit of $274.9 million on an inflation-adjusted basis for the year ended December 31, 2021, which is strong growth.
Investment income increased to ZW$1,722.3 million and net premiums written increased from ZW$611.8 million to ZW$1,070.1 million, driven by aggressive premium reviews and strong organic growth in the life portfolio as well as significant new product inflows,” said company president Livingstone Gwata.
Going forward, the company expects revenues to grow faster than costs through the combination of new financial solutions and new markets.
“High inflation imposes a responsibility on us to ensure that we preserve value for our policyholders and all stakeholders. To that end, diversification of the investment portfolio is a priority for the current financial year,” Gwata added.