A legal battle is looming between former Gauteng Premier Mbhazima Shilowa and BMW Financial Services over about a million-rand shortfall of the vehicle loan the company is trying to recover from him.
The shortfall was incurred after BMW auctioned off his BMW X5 XDriver 30d M-Sport after he surrendered it to the company about five years ago.
The company dragged former Cope deputy president to the Joburg High Court last week after he allegedly ignored its letter to pay the shortfall.
In the papers, which we have seen, BMW said Shilowa bought the luxury Beemer for over R1.4 million on or about August 29, 2018.
He was supposed to pay a total cost of over R 2 million at the end of the sale agreement, it said.
In terms of the sale agreement, said the German machine manufacturer, Shilowa was supposed to pay over R22 000 in monthly instalment on the 25th of every month for a period of 71 months. He was expected to pay a final instalment of over R435 000 on September 25 next year (2024).
But Shilowa breached the contract by failing to pay the agreed monthly instalments.
As a result, the former ANC leader signed an agreement on January 30, 2021, and surrendered the vehicle to the dealership.
“Due to the defendant’s breach as aforesaid, the plaintiff cancelled the agreement and consequently repossessed the asset from the defendant, alternatively the asset was surrendered by the defendant to the plaintiff, which asset the plaintiff sold by way of public auction as it is entitled to do,” read the papers.
BMW said the vehicle was auctioned off and the gross amount received from the proceeds of sale was over R595 000 which was credited to Shilowa’s loan account.
This after deducting administration fees and auctioneer’s commission.
In the premises, BMW said, Shilowa was liable to pay the difference of over R823 000, calculated from the amount the vehicle was sold for and the full outstanding amount. BMW said it sent a default notice to Shilowa last month alerting him about the payment of the shortfall, but Shilowa failed to respond and to pay the amount demanded.
“In the premises, the defendant is indebted to the plaintiff in the sum of R823 923.92. The summons constitutes the demand for the aforesaid,” read the papers.
Shilowa confirmed that BMW told him that there was a shortfall after auctioning off his luxury vehicle, but said he only learnt recently about the amount through his lawyer. He said he was hopeful that they would both find an amicable solution to the matter without facing off in court.
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