Kasama Milling Limited has filed a lawsuit in the Lusaka High Court against the Development Bank of Zambia (DBZ) and its appointed receiver, business executive Andrew Ndanga Kamanga.
The company is seeking more than K5.6 million in special damages and various legal remedies over alleged breaches and mismanagement during periods of receivership.
However, DBZ has denied the allegations, stating that Kasama Milling failed to fulfill key conditions for the loan disbursement, including securing a keyman insurance policy for Professor Lupando Munkonge.
The bank claims that delays in meeting these conditions led to variations in the loan terms and subsequent financial challenges.
In an affidavit filed by Kasama Milling director Lupando Munkonge in the Commercial Division of the High Court, the company alleges that DBZ failed to honor the terms of a mortgage facility dated May 14, 2014, which provided long-term financing and working capital for the company.
Kasama Milling claims DBZ failed to disburse funds promptly, leading to financial difficulties and default on the loan in September 2016.
The company asserts that late disbursement hindered its ability to repay the loan and caused operational setbacks.
Kasama Milling also alleges that during the receivership between 2018 and 2020, the receiver failed to manage company assets effectively or provide an account of their management.
The company claims the lack of transparency persisted even after the receivership ended, complicating efforts to reconcile outstanding debts and attract equity partners.
In April 2023, DBZ placed Kasama Milling in receivership again and appointed Kamanga as the receiver, a move the company disputes due to unresolved disagreements over the outstanding loan balance.
Kasama Milling contends that DBZ’s calculations of the debt, including interest charges, were inaccurate and inconsistent.
The company is seeking multiple court orders, including an injunction to prevent Kamanga from selling mortgaged properties, particularly Stand No. 367 on Mpulungu Road in Kasama.
It wants an order for Kamanga to account for all funds received on behalf of the company, damages against DBZ for negligence and breach of statutory duty.
It is also demanding damages against Kamanga for breach of fiduciary duty and special damages amounting to K5,632,558.50.
The dispute also extends to profit-sharing arrangements with the Zambia National Service, which took over the milling company’s Kasama plant operations in November 2023.
The company alleges that despite ongoing operations, there remains a lack of clarity on how funds generated are being used to service the debt.
