Zimbabwe: Zitac Pays U.S.$931,000 to Boka Investments

Source from:  All Africa 11/11/2010

The Zimbabwe Industry and Tobacco Auction Centre has paid US$931 000 in rentals to Boka Investments (Private) Limited -- the owners of Zimbabwe's largest tobacco auction floors -- for the period between February 2009 and November 2010. Boka had been embroiled in a protracted rental dispute with Zitac that culminated in the parties going for arbitration. An interim arbitration ruling in April ordered Zitac to pay monthly rentals of up to US$43 000. In the arbitration order, Boka had also proposed a payment of 8 percent of gross commission earned by Zitac. Tobacco auctioneers are entitled to a commission of 0,025 percent of the purchase price of tobacco. In addition, the firm also paid 20 percent sub-tenant rent of about US$16 000. Zitac's major shareholder, Mr Wilson Nyabonda, yesterday confirmed they had paid US$931 040 for rentals covering February 2009 and November 2010. "We have paid up our rentals to Boka up to this month," Mr Nyabonda said without elaborating. Arbitrator Mr Benjamin Mutiti had ruled that the basic monthly rental for the Boka premises should be US$36 800. However, these totalled nearly US$43 000 after factoring in value added tax. The arbitration had in the interim concluded that Zitac were supposed to pay US$592 480 for the period between February 2009 and April 2010, plus 20 percent of rentals paid by sub-tenants. Zitac has been renting the Boka premises for the past nine years. Late businessman Mr Roger Boka built the facility in the late 1990s. However, the battle over control of the tobacco floors between the two firms is raging and has spilled into the High Court. Boka is accusing Zitac of contractual breaches and now wants the firm ejected from its premises. Boka is also seeking an order barring the Tobacco Industry and Marketing Board from issuing Zitac with a tobacco trading licence for the coming season because the latter has allegedly turned the auction floors into a centre for vice. Zitac is opposing the interdict on the grounds that its lease expires in six years. Enditem