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Lawyers dump Ken Sharp’s West Prop as company faces Vic Falls listing crisis

Lawyers dump Ken Sharp’s West Prop as company faces Vic Falls listing crisis

Lawyers have dumped West Property as the company battles litigation regarding land making up its recently listed concern on the Victoria Falls Stock Exchange.

In a notice of renunciation on May 10 handed in to the High Court, Messrs Scanlen & Holderness Legal Practioners notified that they were renouncing agency on their representation of West Property and its associates.

The hammer blow comes lawyers representing businessman George Katsimberis and four companies entangled in legal battles with Ken Sharpe and his companies have demanded that WestPro writes a cautionary statement advising prospective investors it has lost part of the land it used to be listed on the Victoria Falls Stock Exchange (VFSE).

On May 9, High Court Judge Justice Nyaradzo Munangati- Munongwa ordered the Sherriff of the High Court to reinstate the attachment of Stand 654 Pomona and advertise for its sale within 10 days to raise money to offset its debt to a Fairclot, a construction company subcontracted by Sharpe’s company, Augur Investments to construct the Airport Road.

This was after the judge ruled that the settling of the debt amounting to US$4.8 million in the local currency using the one-as-to-one exchange rate was illegal.

After Sharpe’s court defeat, Mutumbwa, Mugabe and Partners Legal Practitioners, representing Katsimberis, Fairclot, Coolfitch Investments, Glasswing Investments and Halinka Investments, wrote to the Securities and Exchange Commission of Zimbabwe (SecZim) and the VFSE demanding that WestPro issues a cautionary statement advising investors on the United-States denominated bourse of the latest development.

Stand No 654 Pomona, on the prospectus used by WestPro to list on the VFSE, measures 233 2923 hectares and is valued at US$105 million, which constitutes 50% of WestProp’s portfolio.

“Evidently, as we had cautioned, the property (Stand 654 Pomona Township) which according to the prospectus accounted for over 50% of WestProp’s portfolio has gone up in smoke,” part of Mutumbwa’s letter to SecZim and the VFSE dated May 9 read.
“We believe it is not only prudent but a legal requirement that WestProp informs the public by way of a cautionary statement.”

Mutumbwa added: “You will also notice from the judgment that Augur’s application to have the payment it made at the rate of US$1.00 to ZWL$1.00 declared as having settled its indebtedness to Fairclot was dismissed with costs.”

In response, SecZim said it had referred all the matters to the VFSE, the listing authority to consider the issues.

“We acknowledge receipt of your letter dated 9 May 2023. We have requested the listing authority, the Victoria Falls Stock Exchange to consider the issues raised in your letter in terms of the VEX rules,” part of the letter dated 10 May to Mutumbwa by SecZim chief executive officer Anywhere Taruvinga read.

In another letter to the VFSE, Taruvinga wrote: “We received the attached letter from Mutumbwa, Mugabe and Partners Legal Practitioners. May you consider the issues raised therein and take the appropriate action in terms of your rules.”

The letters were copied to Finance Minister Mthuli Ncube, his permanent secretary George Guvamatanga, WestPro’s lawyers Scanlen and Holderness, MMC Capital (Pvt) Ltd and Mutumbwa, Mugabe and Partners.

Katsimberis and the four companies raised objections to WestPro’s listing, accusing it of hiding information in its litigation report with the deliberate intention of misleading prospective investors. The Fairclot case was one of the many cases omitted in the prospectus.

Stanford Moyo, of Scanlen and Holderness, initially refused to oblige claiming the cases it omitted in the prospectus have no link to WestPro and will not affect its shares. He claimed WestPro has no relationship with Augur.

Augur is a company that is variously owned by Sharpe, Oleksander Sheremet, and Tatiana Aleshina.

Its main assets are various tracts of land that it controversially got from the City of Harare that it got through a deed of settlement from the Local Government ministry that is being challenged in court by Fairclot.

The land in the prime area of Pomona was payment for the incomplete Harare Airport Road project.

Fairclot’s lawsuits emanated from the botched Harare Airport Road deal where Augur pledged title deeds for Stand 654 Pomona Township, which are being held by lawyers Coughlan, Welsh & Guest. Augur claimed it had settled the judgement debt using the one-as-to-one rate, which has now been ruled illegal.

Augur proceeded to appropriate the land that had been agreed upon as part of the payment in violation of its contract with the construction company.
The land was then transferred to Sharpe’s shelf company, Doorex, in an alleged plot to hide it, but is now listed on page 43 of the prospectus for WestPro’s VFEX listing bid.

Doorex does not feature in the prospectus and WestPro has declared that it has no relationship with Augur, the company that secured all the land it used to go for listing on the VFSE.

Meanwhile, sources said the recent set back seen by lawyers dumping West Property could be company could be one of two things: “After they vouched for him to secure a listing. Dumping him now means one of two things: either disagreement in strategy or they discovered he misled to them,” said an insider.

“The company has just lost its flagship property worth 50% of its portfolio and been ordered to pay US$4,8m. It raised less than that in its listing…. The lawyers secured his listing after it was almost stopped by saying he was never going to lose those cases. He lost.”

Lawyers dump Ken Sharp’s West Prop as company faces Vic Falls listing crisis

Lawyers dump Ken Sharp’s West Prop as company faces Vic Falls listing crisis