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Chivayo walks free over $5,6million fraud case



Wicknell Chivayo

Wicknell Chivayo was yesterday absolved of any criminal liability in the $5,6 million fraud charge involving the Zimbabwe Power Company’s (ZPC) Gwanda solar project deal.

Chivayo was on trial facing three counts of fraud while the other two counts of breaching the Exchange Control regulations suffered a stillbirth, shortly before the trial commenced.

It was also the court’s finding that considering the circumstances of Chivayo’s case, allowing prosecution or at worst his conviction would amount to violation of Section 42 of the Constitution, which provides protection upon the doctrine of sanctity of contracts while the judgment underscored that criminal sanctions would not apply in inherently civil cases as the present.

Wicknell Chivayo had in the lower court attempted to quash the charges through an application for an exception but this was thrown out by magistrate Mr Lazini Ncube, presiding over the trial.

This prompted Chivayo, who was being represented by Advocate Lewis Uriri instructed by Mr Wilson Manase, to challenge the decision at the High Court, seeking a review of the lower court’s proceedings.

Justice Owen Tagu ruled that the decision of the lower court in dismissing Chivayo’s application for an exception in November last year was defective as the facts could not sustain a criminal suit.

He cleared Wicknell Chivayo of any wrongdoing and threw out the State’s case for want of merit.

“It is ordered that the second respondent’s ruling of 19 November 2018 in case Number CRB p9114-5/18 be and is hereby set aside. In the result, the exception succeeds. The charges are hereby quashed. Consequent to the accused’s plea, both accused be and are hereby acquitted”.

In his ruling, Justice Tagu noted that in the civil suit in which Wicknell Chivayo won against ZPC, the complainant denied ever instituting criminal suit against the businessman and his company.

He said it is a pinnacle of criminal procedure that for a person to be competently charged and tried of a criminal offence, there should be a person (natural or juristic) who should complain of criminal conduct of the accused.

“It invites confusion and uncertainty on how the State formulated the charges preferred against the accused persons if the known complainant has denied ever instituting the same,” he ruled.

“Apart from being suggestive of a skirmish, a mere witch hunt and a fishing expedition, it tells more of a hidden hand or mal a fides intention in the institution of the criminal proceedings brought about by the State in the circumstances.”

Justice Tagu also noted that two different judges of the same court in separate sittings and dealing with different issues, but relating to a similar cause of action concurred on the lack of merit in the criminal case.

This, he said, was no coincidence. “Rather, it demonstrates the extent of common acceptance that the criminal case is at best… a high sounding nothing,” said Justice Tagu.

He said the charges, which arose from a civil dispute and incapable of being resolved through the criminal justice system, were contrived and properly excepted to.

“The relationship between the complainant and both applicants is contractual therefore any remedy for a dispute arising therefrom should be a civil and in terms of the contract.

“The State cannot be enjoined through the apparatus of the criminal justice system to determine contractual obligations,” he said.

The facts, said the judge, did not disclose any criminal offence. “It seems compelling that having a civil matter determined by the State through the criminal justice system is not only wrong but sets a dangerous precedent if not tamed at its inception,” he ruled.

“This approach bears the greater danger of opening every commercial transaction to criminal liability, a situation that may degenerate into chaos if left to prowl freely.”

The judge added that if the courts allowed such prosecutions to occur in this country, no investor would open themselves to the extreme exigencies of having the fate of their investment determined by a criminal court where, inter alia, the standard of evidence should be beyond reasonable doubt.

When contacted for comment, Chivayo apologised to President Mnangagwa, Transport and Infrastructural Development Minister Joram Gumbo, Prosecutor-General Mr Kumbirai Hodzi, ZPC and the nation at large for the delayed implementation of this solar project of National importance.

“With this development, we remain committed to executing the project and feed in a 100 MW of clean energy into the national grid within the shortest possible time,” he said.
The Chronicle

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Zimbabwe agrees to pay $3.5 billion compensation to white farmers



Zimbabwe White Farmers

Zimbabwe agreed on Wednesday to pay $3.5 billion in compensation to Zimbabwe white farmers whose land was expropriated by the government to resettle black families, moving a step closer to resolving one the most divisive policies of the Robert Mugabe era.

But the southern African nation does not have the money and will issue long term bonds and jointly approach international donors with the farmers to raise funding, according to the compensation agreement.

Two decades ago Mugabe’s government carried out at times violent evictions of 4,500 Zimbabwe white farmers and redistributed the land to around 300,000 Black families, arguing it was redressing colonial land imbalances.

The agreement signed at President Emmerson Mnangagwa’s State House offices in Harare showed white farmers would be compensated for infrastructure on the farms and not the land itself, as per the national constitution.

Details of how much money each farmer, or their descendants, given the time elapsed since the farms were seized, was likely to get were not yet clear, but the government has said it would prioritise the elderly when making the settlements.

Farmers would receive 50% of the compensation after a year and the balance within five years. Finance Minister Mthuli Ncube and acting Agriculture Minister Oppah Muchinguri-Kashiri signed on behalf of the government, while farmers unions and a foreign consortium that undertook valuations also penned the agreement.

“As Zimbabweans, we have chosen to resolve this long-outstanding issue,” said Andrew Pascoe, head of the Commercial Farmers Union representing  Zimbabwe white farmers.

The land seizures were one of Mugabe’s signature policies that soured ties with the West. Mugabe, who was ousted in a coup in 2017 and died last year, accused the West of imposing sanctions on his government as punishment.

The programme still divides public opinion in Zimbabwe as opponents see it as a partisan process that left the country struggling to feed itself. But its supporters say it has empowered landless Black people. Mnangagwa said the land reform could not be reversed but paying of compensation was key to mending ties with the West. Reuters

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Old Mutual’s Share Price Is Focus in Zimbabwe’s Currency War



Old Mutual Shares Zimbabwe

The share price of one of Africa’s oldest insurers is taking centre stage in Zimbabwe’s battle to bring order to its chaotic foreign-exchange system.
In the latest in a series of attempts to stabilize its currency, the government wants to eradicate the Old Mutual Implied Rate.

The gauge, used by domestic companies to determine the future cost of goods and services, calculates a potential forward rate for the Zimbabwe dollar by measuring the difference between Old Mutual Ltd.’s share prices in Johannesburg, London and Harare.

The indicator is among many “contrived phantom exchange rates” in use that “conspire to defeat fiscal policy,” the government said in a June 26 edict that halted trading on the Zimbabwe Stock Exchange and stopped most mobile-banking transactions.

The OMIR is one of the multiple exchange rates Zimbabweans use daily to navigate the nation’s myriad economic challenges, including annual inflation of almost 800%.

A perennial shortage of cash means anyone who has physical banknotes is able to negotiate exchange rates with brokers who pay the funds onto mobile-money platforms. The brokers can then sell the hard cash at an even higher rate.

That’s resulted in a widening gap between the official rate of 63.7 per U.S. dollar, and the amount at which it trades on the streets of Harare, which is now at 100.

“People have relied on making money from buying and selling Zimbabwe dollars, and not from any real production,” said John Robertson, an independent economist based in Harare. “It’s what has created these distortions.”

The OMIR also feeds into the black-market Zimbabwe dollar rate, which the nation’s bourse uses, along with the official rate, to determine the value of stock prices.

Old Mutual, founded in Cape Town in 1845, is not involved in determining the rate. Market participants take the company’s share prices in South Africa, the U.K. and Zimbabwe, convert each of them into the U.S. dollar, which should typically trade near par.

The finance minister, however, in March restricted trading in the shares of Old Mutual and two other companies by making the stocks no longer fungible or regarded as being equal in value to those traded on other exchanges, in a bid to prevent outflows caused by the dual listings.

Despite the move, investors poured into Old Mutual, using it as a proxy to the U.S. dollar because of its offshore listings, pushing the Zimbabwe-listed stock up 90% since the beginning of May. The shares in Johannesburg and London were little changed, resulting in the implied rate doubling to 122 as the gap between the securities widened.

Zimbabwe’s benchmark industrial index has risen more than sevenfold this year, reaching a record on June 24, and giving the overall bourse a market value of about 229 billion Zimbabwean dollars ($3.6 billion). None of the stocks in the 57-member index has declined this year as Zimbabweans seek a haven from runaway price increases and the weaker currency, which has slumped to 63.7442 per U.S. dollar after a 25:1 peg put in place since March was abandoned.

Suspend Listing
Authorities now want to eliminate the OMIR before allowing any trading to resume on the Zimbabwe Stock Exchange, people familiar with the matter said, asking not to be identified because the talks are private. The OMIR was the focus of various meetings on Monday between members of Zimbabwe’s stockbrokers’ association, the stock exchange, the Securities and Exchange Commission and the Treasury, the people said.

Measures being considered to include suspending Old Mutual’s shares from the Harare-based bourse, having the securities traded only in dollars, or moving the listing to the Victoria Falls Stock Exchange, a market that will only trade in foreign currency once it opens later this year, the people said.
Nick Mangwana, the government’s spokesman, referred queries to the finance ministry. Several calls and text messages sent to Finance Minister Mthuli Ncube and central bank Governor John Mangudya seeking comment weren’t answered.

“There has not been any official communication from authorities in Zimbabwe to Old Mutual,” the Johannesburg-based company said in an email “We have asked our local subsidiary to reach out to our stakeholders in Zimbabwe to try and understand the circumstances around ZSE closure and other related matters.”

Discussions over the halting of trade on the stock exchange are ongoing and the outcome is still uncertain, SEC Chief Executive Officer Tafadzawa Chinamo said by phone. Zimbabwe Stock Exchange CEO Justin Bgoni said on Sunday that the bourse would wait for guidance from regulators.

In comments at a briefing after a cabinet meeting on Tuesday, the finance minister said that stockbrokers should assure their clients that their investments in the stock market are safe and that the bourse will reopen once investigations are complete. Bloomberg

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Zimbabwe government suspends mobile money transactions



Nick Mangwana

Zimbabwe government has, with immediate effect, suspended all monetary transactions on phone-based mobile money platforms to facilitate investigations that will lead to the arrest and prosecution of people responsible for sabotaging the economy.

In a statement this evening, Secretary for Information, Publicity and Broadcasting Services, Mr Nick Mangwana, said the measures will include the suspension of all trading on the Zimbabwe Stock Exchange.

The suspension will be in place until mobile money platforms have been reformed to their original purpose and when all the present phantom rates have converged into one “genuine rate that is determined by market forces under the foreign currency auction system which was launched by the Reserve Bank of Zimbabwe” on June 23. Operational modalities and details of the envisaged measures will be announced by the relevant monetary, regulatory and law enforcement authorise in the next few days.

The government will ensure that prudent measures are put in place to mitigate and prevent any collateral damage that the interventions may cause to the innocent public that was using the mobile money platforms. The Herald.

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