ENG Capital vs Farai Rwodzi & Interfin Bank Zimbabwe Dispute unpacked (Part 4 of 10

ENG Capital vs Farai Rwodzi & Interfin Bank Zimbabwe Dispute unpacked (Part 4 of 10)
Farai Rwodzi and Interfin Bank clearly have no answer to the fact that they irregularly and illegally grabbed Century /CFX Bank but avoidance, pretentiousness and pretense .Given that High Court case HC-6244-04 is still before the courts it is a puzzling mystery that Farai Rwodzi and Interfin Bank even had enough guts to go and convince a respectable lawyer such as Mr Sternford Moyo to provide a legal opinion based on incomplete facts. This is shocking for a Banker to go and mislead a respectable senior lawyer of Mr Moyo’s experience and stature.
Having reviewed Mr Sternford Moyo’s Opinion which appeared on NEHANDARADIO.COM it is clear Mr Moyo was not well briefed and his reputation is being abused by individuals who are determined to conceal their shaddy deals by asking him to provide an opinion that he would otherwise not provide should he review all facts especially my affidavit for High Court Case HC -6244-04.Mr Moyo has been made to believe that the sale of the shares was never challenged.
However this is false and misleading because right now High Court Case HC-6244-04 filed by my then lawyer Mr Oscar Ziweni in May 2004 is still pending as such Mr Moyo can not state that the sale of the shares was never challenged.
Mr Sternford Moyo is one of Zimbabwe’s most respected and senior lawyers and it is clear he only provided an opinion based on incomplete and in-accurate facts provided by Farai Rwodzi and Interfin Bank. I remain convinced that should Mr Sternford Moyo review High Court Case 6244-04 he will undoubtedly revise his legal opinion and advise Farai Rwodzi correctly that the take over of Century /CFX Bank was null and void in addition to being illegal and irregular.
Due diligence basically means using common sense, doing your homework and thinking things through before investing time and money in an opportunity.
In business transactions, the due diligence process varies for different types of companies. The relevant areas of concern may include the financial, legal, labor, tax, IT, environment and market/commercial situation of the company. Other areas include intellectual property, real and personal property, insurance and liability coverage, debt instrument review, employee benefits and labor matters, immigration, and international transactions
Below is an extract from - Diligence long overdue - conducting prudent due diligence May, 1999 by Lawrence G. Graev. It clearly outlines some of the dangers of doing transactions without proper due diligence

“The rush to join in today's frenzy of M&A transactions has some companies viewing due diligence as a necessary evil - and giving the process short shrift. Yet, cutting corners can destroy a merger, thwart strategic gains from the deal, and plunge a company into costly, distracting, and potentially ruinous litigation.
As a young associate at a large law firm working on one of my first M&A transactions, I was shocked to see how our client, a sophisticated merchant banking firm, pushed on all the professionals to "get the deal done." About three months after the closing, I was asked to share my recollections of the deal with a senior litigation partner of the law' firm, who told me that our client had discovered an "inventory problem" at the acquired company. I subsequently learned that the "inventory problem" involved finding out that a significant number of paint cans - the company was a manufacturer of paint - in finished goods inventory contained water instead of paint.
Even as a young associate, it seemed to me that this "problem" could have been identified prior to the closing with some prudent due diligence and coordination with the various accounting firms involved in the transaction. My experience since then suggests that in all too many M&A situations due diligence is viewed more as a necessary evil than as an integral - and potentially beneficial - part of the process.
The 1997 merger of HFS with CUC International to form Cendant Corp., for example, was announced with great hoopla. However, as a result of CUC's inadequate financial controls, Cendant was forced to report that net income had been inflated by $500 million over three years.
Earlier this year, Michael Ovitz, the former president of Walt Disney Co., invested $20 million to take control of Livent. It was only after this expenditure that Ovitz and his associates apparently discovered accounting irregularities in the company's records that contributed to Livent's bankruptcy filing and the possible loss of Ovitz's investment.
These cases are unusual in that fraud was, or may have been, involved. More typical situations involve pre-existing environmental conditions, tax liabilities, litigation, and agreements that can stifle a company's strategy for a deal because they bar it from acting in an intended manner, or impose a hidden cost. In a mammoth deal, such as the $75 billion Exxon/Mobil merger, there are thousands, or tens of thousands, of commitments and agreements. There are dozens of environmental risks related to production, refining, and distribution that should be checked. There are existing lawsuits, some with and some without merit, that need analysis.
Until these have been examined, Lee Raymond of Exxon and Lucio Noto of Mobil can't know whether Exxon/Mobil can achieve the intended cost savings of $2.8 billion annually and whether Exxon/Mobil can actually reduce its work force by 7.3 percent, or 9,000 jobs. The companies can't even know whether their cultures will mesh synergistically or clash and prevent bold action. Such was the case, for example, at Pharmacia & Upjohn, until a new CEO, Fred Hassan, put a stop to arguments between Swedish and American employees of the merged companies.
Due diligence is risk management. Risk management calls for judgment and analysis. The trade-off in a merger or acquisition is how much risk a CEO is prepared to assume in closing a deal versus the risk of not getting a deal done. There is no easy answer, but far too often the urge to "close" a deal can fog judgment and lead to unnecessary risk assumptions.
Although the cost of due diligence is one hurdle, the psychological capital already invested by the CEO and management group in the deal can be an even greater obstacle. The seller emphasizes its desire for the quick development of an operational and financial structure that will lead to the speedy completion of the sale. Because of the time and effort expended to effect the merger or acquisition, not-too-subtle pressure, often from major investors, is placed on anyone or anything endangering its fruition - including due diligence.
But this pressure must be overcome if the CEO is to be successful in his or her M&A activity. Since the margin of error for survival in M&As is thin - and getting thinner - due diligence should start even before negotiations are underway. What's more, beginning the process early on could head off a long, costly effort to unwind a transaction that should never have been entered into in the first place.
Ideally, good-faith negotiations between lawyers for the two parties should take place at every step along the way. And for the buyer's lawyers to be able to negotiate most efficiently - on the purchase price, on the structure of the transaction, on the allocation of risk between the parties for liabilities and other contingencies, and on other significant terms - a vast store of data ought to be forthcoming from due diligence. That data will eventually be the basis for both the purchase agreement and the closing documents.”
These are general guidelines that Investors need to follow to ensure that they do not invest in encumbered assets with hidden or contigent liabilities. Mr Farai Rwodzi and Interfin Bank Zimbabwe did not do a proper due diligence. In addition they have gone further by misleading a leading lawyer to issue a legal opinion based on incomplete and false facts.
This behavior only serves to confirm that Mr Farai Rwodzi and Interfin Banking Corporation have something to hide that’s why they misled a leading lawyer without letting him review details of High Court Case HC-6244-04

This article appears courtesy of GMRI CAPITAL – www.gmricapital.com . It is generated for 3MG MEDIA – www.3mgmedia.ca .

Gilbert Muponda is an Investment Banker and Founder of GMRI CAPITAL . He can be reached at; www.ZimFace.com and
www.facebook.com/muponda
Email: gilbert@gilbertmuponda.com . Skype ID: gilbert.Muponda
Twitter ; http://twitter.com/gmricapital
Phone: 1-416-841-5542