REGAL Insurance Company (Pvt) Ltd, which was suspended from operating following its failure to settle policy claims, has approached the High Court with an application for rescission of judgment after its property was recently attached over a $1 400 303 debt owed to policyholders.

The insurance company was suspended by the Insurance and Pensions Commission (Ipec) on allegations of fleecing policyholders, but the company’s chairperson Jerious Mkondo refuted the allegations in his recent court application accusing former employees, including suspended chief executive officer, of having created a scam to bring the firm down.

Mkondo said his former employees allegedly hatched a plan to defraud the firm by facilitating the obtaining of a default judgment over payments that were supposed to have been administered and settled by Ipec.

“This is an application for rescission of a default judgment that was granted in favour of the first respondent (Regal Insurance Policy Holders Association) on June 7, 2019 which applicant became aware of on November 15, 2019 for the sum of $1 400 303 together with cots and collection commission,” Mkondo said.

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“The applicant (Regal Insurance Company (Pvt) Ltd) was not in wilful default, as it is suspected that one of its former employees fraudulently facilitated the granting of the default judgment.”

Mkondo said when Regal Insurance Policy Holders Association (RIPHA) issued summons against the firm, “which where purportedly served on it”, there was no appearance, but the association proceeded to obtain default judgment against it.

“It has now emerged that first respondent was formed by some of applicant’s former employees who were working with some of the applicant’s debtors to defraud the applicant. The summons was therefore not deliberately defended and default judgment entered against the applicant in the sum of $1 400 303 as this was a fraudulent scheme involving applicant’s former employees,” he said.

“It is clear that in view of the quantum involved, applicant would not have ignored the summons. It can only be an inside job which has seen the suspension of the chief executive office involved in the scam.”

Mkondo further noted that pursuant to the default judgment, a writ of execution against movable property was issued against his firm on June 24, 2019, but no nulla bona return was produced, adding that the next his firm saw was the notice to sell the company’s property by public auction on November 15, 2019.

“The property was sold on November 15, 2019 by public auction for $1 800 000, but was later cancelled and will proceed by public treaty.”

The matter is pending.