Businessman owes insurer after it paid his creditors
Former president Jacob Zuma’s cousin and business mogul Vernon Zuma, his wife Shereen Edith and their company, Sozala Energy, have been slapped with a R3.3-million lawsuit by their insurance company after failing to pay for monies paid to their creditors – oil giants Sasol Oil and Total South Africa.
Lombard Insurance filed a combined summons at the Joburg high court on Wednesday stating that Sozala Energy and Shereen had failed to reimburse them millions paid to their creditors as part of their indemnity agreement.
According to the court documents Zuma, who was in the news last year after being sued by a car dealership for R4.2-million for a Bentley he had failed to pay for, and his company Sozala Energy, had taken a counter indemnity with Lombard insurance on June 11 2018 agreeing to indemnify the insurance company from any liabilities, claims or losses, costs and expenses that the insurance company would incur as a result of having executed any guarantees on behalf of their company.
In this agreement Zuma, his wife and their company agreed to reimburse Lombard Insurance any monies it was to pay to their creditors. The papers show that the businessman and his wife also signed as sureties for any of the debt settled by the insurance company. They also used their family trust as surety to conclude the agreement.
However, in its papers, Lombard Insurance revealed that it received a demand for payment of R2.3-million from Total last September under the R3-million
guarantee accorded to their company as part of the guarantee, after Sozala Energy had defaulted on its payments with the energy giant.
They said this was also followed by another demand of R1-million by Sasol under the R2-million liability guarantee allocated to the company.
Lombard Insurance said it had settled all these debts on behalf of Zuma’s company as per the guarantee agreement.
“In terms of counter indemnity, suretyship, and trust suretyship, the first defendant, second defendant, third and fourth defendants became indebted to the plainti£ in the amount of R1 023 795,45 on or about 17 September 2019, and a further amount of R2 337 642,69, inclusive of value added tax, on or about 4 September [being a total amount of R3 3361 738,14],” reads the papers.
However, it said that despite Zuma, Shereen and their company standing as surety for the guarantees, they failed to reimburse them the amount paid to the two energy companies.
The insurance company said Zuma, his wife and their company also ignored le¢ers of demand sent to them reminding them of their obligations under the guarantee agreement they had signed.
“Notwithstanding demand, the first defendant, second defendant, third defendant, fourth defendant and fifth defendant refuse and or neglect to make payment to the plainti£ in the amount of R3 361 738,14, alternatively, this summons constitutes demand,” reads Lombard’s papers.
The insurance asked for the millions to be paid back with the interest rate calculated at the rate equal to the prime overdraft rate of Absa plus 2%. Lombard’s attorney Willem Steyn from Bembridge Minnaar Attorneys said they could not comment on the court proceedings.
Zuma did not respond to requests for comment.
By Aubrey Mothombeni