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Fidelis Munyoro Chief Court Reporter
HARARE businessman Mr Jayesh Shah is claiming more than $4 million from a British bank for the economic loss his company suffered after the latter falsely classified the funds held in his account as arising from money laundering activities.
Mr Shah says HSBC Bank in September 2006 reported to the Serious Organised Crime Agency (SOCA) his request to transfer almost $28 million to his other account in France as “suspicious”.

The allegations of money laundering in the UK later the following year adversely affected the $22 million-loan deal his company, Al Shams Global BVI Limited, had struck with the Reserve Bank of Zimbabwe.

According to the loan agreement Al Shams Global BVI Limited, a company registered in the UK, would avail $22 million to the RBZ on a revolving basis.
In return, Al Shams Global BVI Limited would get an arrangement fee of 18 percent and a disbursement fee of 1 percent flat on the loan amount.

This would have earned Mr Shah’s company a profit of $4 180 000.
After the deal was concluded, rumours spread in Harare that Mr Shah was suspected of money laundering in the UK.

RBZ became suspicious and cancelled the deal.
In the claim filed at the High Court, Al Shams Global BVI and Mr Shah are seeking to recover $3 960 000 being the arrangement fee of 18 percent flat on the loan amount and $220 000 being disbursement fee of 1 percent of the loan from HSBC Private Bank (UK) Limited and its commercial bank, HSBC Bank.

Through its lawyers Dube, Manikai and Hwacha, Al Shams Global BVI says the claim arose from the loss suffered as a result of the HSBC holding company and its bank’s conduct of allegedly interfering with the loan deal after reporting Mr Shah to SOCA without just cause, resulting in the RBZ cancelling the loan deal.

“The cancellation was caused by the defendants’ failure to give information to him or RBZ explaining the basis on which the Suspicious Activities Report had been made,” said Al Shams Global BVI.

HSB Bank, which is being represented by Advocate Adrian de Bourbon, is denying the claim and seeking an exception to the lawsuit.
Adv de Bourbon argues that the claim, in this case being one for damages for pure economic loss, fails to meet the requirements of the wrongfulness in terms of the law.

“As a matter of law, the plaintiff is a separate legal persona to (Mr) Shah and any wrong allegedly done to Shah cannot in law form the basis of a claim brought in the name of plaintiff (Al Shams Global BVI).”

Two years ago, Mr Shah sued HSBC for $300 million at the Court of Appeal in London for making false reports against him to SOCA in the case involving the transfer of close to $28 million to his other account in France.

HSBC had in 2006 reported a case of suspected money laundering to the SOCA, which had the effect of temporarily freezing his account.
He argued at the Court of Appeal that as a consequence of HSBC’s decision, he had been stigmatised in Zimbabwe and suspected of criminal activity.

Mr Shah claimed his assets in Zimbabwe had been seized and frozen by authorities. However, Justice Supperstone ruled in favour of HSBC Bank saying it was not the bank’s delay in executing the payment instructions and its failure to provide information but the Zimbabwean authorities’ own independent concerns that led to the losses by Mr Shah and his wife.

The judge also said in his ruling that in his view Mr Shah was able to, but did not, take reasonable steps to mitigate or avoid his loss.
Mr Shah, a customer with HSBC Private Bank for many years, first transferred $28 million to his HSBC account in London from an account at Crédit Agricole, the French bank.

When he tried to transfer most of the money back to Crédit Agricole in 2006, he was told by HSBC that it could not effect the transaction because it was complying with its UK statutory obligations as the bank had made a Suspicious Activity Report to a regulatory authority.