Lonrho sued for fraudulent misrepresentation
Lawsuit also accuses Lonrho of breaches of contract and diversion of insurance claims
Tuesday 05 August 2014
Lonrho, the UK investment company which used to dominate vast swathes of Africa under the buccaneering leadership of Tiny Rowland, is being sued for fraudulent misrepresentation by a former subsidiary over the lease of three aircraft used in Kenya and Zimbabwe.
The former subsidiary, now called Cambria Africa plc and an investment firm listed on the junior AIM stock market, alleges that Lonrho transferred $1 million to a different subsidiary through a loan facility agreement which Cambria Africa alleges was a “sham” , according to a High Court writ filed last month.
Lonrho is alleged to have misappropriated other funds from the proceeds of renting out aircraft owned by Cambria Africa and not paying them the lease payments which were contractually due, according to the High Court writ filed last week.
The $10 million claim also accuses of Lonrho of fraudulent misrepresentation when Cambria bought one of its aircraft, breaches of contract and diversion of insurance claims proceeds by Lonrho to another subsidiary which were due to Cambria.
The dispute relates to three aircraft rented out to Lonrho subsidiaries, one of which was acquired from Lonrho. These aircraft were allegedly returned in a damaged and dilapidated state, never flew again and were sold for scrap value, according to the writ, and the subsequent claimed loss in value of the planes is a central focus of their lawsuit.
Lonrho is also accused of fraudulent misrepresentation during negotiations to reach a settlement last year.
When asked about these allegations, Lonrho told 'The Independent': "Lonhro Ltd is a private company and will not be commenting on these reports" The shareholders of Lonrho - Swiss billionaires Thomas Schmidheiny and Rainer Marc Frey - also declined to comment.
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