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16 Oct 2008 17:55
Absa is likely to ask for leave to appeal a Pretoria High Court judgement ordering it to pay Pretoria businessman Rico Bernert “an undetermined amount” for damages, the bank said on Thursday.
“The order states that the damages still need to be determined. Reports that allude to Absa being ordered to pay R187-million in damages are incorrect,” said the bank’s spokesperson Makhosini Nkosi.
Nkosi said their attorneys were studying the judgement and would advise them on appropriate action.
“At this juncture though, it seems likely that Absa will appeal against the judgement.
We believe that there are reasonable prospects of another court arriving at a different decision in this matter.”
Pretoria High Court Judge Natvarial Ranchod on Tuesday ordered Absa to pay Bernert R187-million in damages as a result of bank’s “misstatement and its eminently foreseeable consequence”, according to Business Report.
Ranchod said there were no policy considerations justifying the release of Absa from the responsibility for that consequence.
In addition to the R187-million damages award, Absa also had to pay interest for six years at 15,5% annually.
According to the report, the R187-million claim related to the financing of Bernert’s project to produce a fibreglass military patrol vehicle called El Macho, light enough to be deployed by helicopter.
The vehicle was to be manufactured by Rotrax Cars International, a close corporation owned by Bernert and his uncle.
In 1999, a member of the Bahraini royal family, Sheik Abdull Al Fawaz, agreed to invest $6-million (R56-million) in a joint venture with Rotrax to build a plant to manufacture the vehicles in South Africa.
The money was to be transferred from Dubai through Emirates Bank International on condition that Bernert negotiated with a highly-rated bank in South Africa for a fixed-deposit account.
A relationship manager at Absa in Brooklyn, Pretoria, Louis Coetzee provided Rotrax with a letter of guarantee stating Absa proposed paying 1% interest in US dollars on the amount.
When Bernert handed the letter to Fawaz in Dubai, he was informed that Absa’s lawyers had written to Emirates Bank International, saying the letter was fraudulent because Coetzee had no authority to issue it.
The bank said it also suspected it would be used for money laundering.
Fawaz pulled out of the venture, vowing never to do business in South Africa again. He said the letter had destroyed his reputation.
Tuesday’s court ruling came nine years after Bernert began legal proceedings against Absa. He had contended that the bank made a wrongful and untruthful statement in the letter to Emirates Bank International, and that the bank’s offer was binding. - Sapa
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