Malawi Savings Bank stops sale of Mulli Brothers assets

Government owned Malawi Savings Bank (MSB) has obtained a court injunction, blocking Mulli Brothers Limited from disposing of some of the company’s assets, court documents say.

The court record says the High Court granted MSB an injunction on March 14, 2013, effectively stopping Mulli from selling the properties which they reportedly advertised for sale.

The order, granted by Judge Joseph Manyungwa, restrains Mulli Brothers from selling off Thuchila Estate in Phalombe, Nantipwiri Estate at Bvumbwe, Lot’11 of Lauderdale Estate, Tinyade Estate in Mulanje and Lot'(1) of Upper Pumula in Thyolo.

“The plaintiff whether itself, its shareholders, directors, agents, employees or whosoever be restrained from prohibiting, prevention, inhibiting or restraining the defendants duly appointed valuation surveyors, Griffin Baloyi or any other valuer acting on behalf of the defendant from entering upon any of the properties charged by the plaintiff to the defendant for purposes of establishing the current market values,” reads the ruling in part.

Among other arguments, the bank claims that the property was part of the assets Mulli used as collateral on a K3.2 billion overdraft it took from the bank which was later turned into a loan.

The bank is currently fighting repayment of the loan in court. Mulli Brothers, however, is challenging the injunction.

In an application filed for the vacation of the court order, whose hearing commenced on Monday, Mulli through its lawyeramong others, argues that MSB obtained the injunction through the backdoor by among other things not furnishing the court with full, frank and fair facts.

“The defendant obtained a mandatory order by disguising it as an interlocutory injunction order and the same having been granted ex-parte ought to be set aside,” argues Gondwe in his sworn affidavit.

The MSB injunction follows the rejection of a proposal made to MSB by Mulli in February this year where it, among other things, disclosed the intention to sell some of the assets.

In a letter of rejection to Mulli, the bank said there was nothing new in the proposal regarding how the company intends to repay the loan, arguing additional collateral constitutes the same property which the company mortgaged to MSB.

It further claims that Mulli has failed to demonstrate commitment to repay the loan, saying the company has not made deposits for six months.