The Sunday Mail
AFTER Shabanie Mashaba Mine (SMM) instituted sequestration proceedings against South African-based Zimbabwean businessman Mr Mutumwa Mawere recently, there are now questions of what will become of his business empire.Last week, The Sunday Mail Business Editor Darlington Musarurwa spoke with him to get his take on the new turn of events and his general views on how the case has been playing out in the South African courts. Suffice to say he is a very bitter man.
Q: Mr Mawere, I am sure you will agree with me that part of this case seems to hinge on circumstances surrounding the Cession Agreement and Justice van Oosten’s subsequent court order, which made it possible for SAS to cede amounts purportedly owed to Petter Trading? Do you agree with Justice Willis findings – made through the October 11, 2012 order – that the Cession Agreement was fraudulent?
A: I agree with your frame. I think you will also agree that the version agreement was signed on 28 April 2004. If you look at paragraph 96 of the Justice Willis judgment:
(v) That the first defendant had been a director of SAS, more particularly during the period 1 April 1996 to 1 March 2004; (vi) That the first defendant had been a director of Petter, more particularly from 1 July 1998 to 1 March 2004.
So, like Justice Willis said, it is and was common cause to him that I was not a director of both Petter and SAS when the cession agreement was signed.
However, in paragraph 94 of the judgment, Justice Willis stated: “He accepted that it was correct that the first defendant had, at all material times, been a director of SAS,” meaning Sanangura.
This statement alone tells you the confusion in the judgment.
If it was common cause to him that I was not a director on 28 April 2004 – the only relevant and material time in creating the circumstances of the alleged fraud – how could the same judge import Sanangura’s voice on established facts?
Either I was a director or not when the cession agreement was signed. I trust you will be able to see through the mischief.
Now turning to the alleged fraud. I am sure you will agree that fraud has its elements. The question is whether the legal status of the cession agreement was ever dealt with on its merits as a dispute independent of any other subsequent facts like the cession court order and the allegations of the alleged derivative movement of funds from SAS to Petter.
“Fraud must be proved by showing that the defendant’s actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3)intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged …”
I am sure you will agree with (the) above statement picked from the internet. Knowledge and intention are key elements.
In addition, fraud causes harm. In this case, Justice Willis needed to have dealt with the facts of the dispute relating to the cession agreement having regard to the fact that I was not a signatory of the agreement, meaning that the learned judge would have needed to have heard the sides of all the signatories and, as a defendant, I would have been given the opportunity to cross examine the signatories before jumping to the conclusion that the only plausible explanation to the signing of the cession agreement was for fraudulent intent. Sanangura’s evidence in court was that he signed the cession agreement to protect SAS as the Reserve Bank of Zimbabwe had since December 2003 stopped any payments by SMM to Petter, resulting in Petter’s creditors refusing to supply.
In addition, he said that the payments to Petter by SAS were in the ordinary course of business, and in order to advance money to Petter, SAS had relied on the fact that Petter was owed money by SMM, which money has not been paid to date.
To the extent that SMM was indebted to Petter in excess of the R18 million paid by SAS to Petter, SMM could not claim prejudice, especially knowing this fact. I am sure you will agree that this dispute could only be contested in an open and transparent manner.
There are no facts supporting the allegation of fraud was ever contested. An allegation cannot be a finding without following the prescripts of the law.
Q: But was the Cession Agreement obtained in 2004 and back-dated to 2003? If this is so, why? And also was agreement approved by the SMM board?
A: Please look at paragraph 94 of the Willis judgment where it is stated as follows: He said that SAS had paid Petter the amount of R18 million before the signing of the cession agreement.
The money had already been paid by SAS to Petter before the signing the cession agreement. However, SMM due to the monetary measures introduced after (Dr Gideon) Gono’s appointment, was forced to surrender a bigger portion of its forex earnings to the RBZ. This resulted in SMM not being able to pay to its strategic supplier.
In the circumstances, Petter had to seek the protection of the court, hence the cession agreement to confirm the legal basis on which SAS paid the money without any security as the three companies were related parties.
But now there was an elephant in the room: being the RBZ compelling SMM to surrender the very forex that was needed to pay to creditors.
The SMM management had alerted all the state actors, including the RBZ, about the role of RBZ in undermining the operations of SMM group companies dependant on Petter.
Q: We are aware that SMM instituted sequestration proceedings against you on November 16 last year, and Dr Sanangura, the previous financial manager of SAS, has applied to be part of the proceedings. Will you also be opposing SMM’s application?
A: Obviously no. It would be stupid for me to oppose an application intended to expose a judgment tainted by fraud. At no stage has SMM under the control of Gwaradzimba been interested in facts and not fiction.
You will agree with me that if money had been paid as a matter of fact, then surely SMM would have been quick to produce the relevant bank statements. Is it not ironic that no bank statements have ever been disclosed in court?
You will be aware that Sanangura tried to produce the documents, including bank records showing and supporting his proposition that the R18 million had been paid before the signing of the cession agreement, which evidence would have precluded Justice Willis from relying on hearsay to make a finding.
Q: It seems there are major disagreements on whether the R18 million that is at the centre of all this controversy was transferred before or after the Cession Agreement and Justice Oosten’s court order. However, it was Justice Willis’ findings (paragraph 114) that the Cession Agreement was” devised for the purpose of diverting funds”. What is your take on this?
A: Any judge who is impartial will always be guided by evidence. In this case, evidence must exist and ought to have existed at the time, showing the causal link between the cession agreement and the alleged payments.
That evidence is missing in action. The proof of the pudding is in the eating and, equally, if the alleged cession scheme was devised for the purpose of legitimising a fraud, then why did Justice Willis refuse to allow evidence that showed the opposite.
Q: Furthermore, SMM’s attorneys – ENSafrica – claim that at the trial, you didn’t dispute the fraudulent execution of the Cession Agreement or the pretenses under which the Cession Court Order was secured. Is that true?
A: You will appreciate that a claim of murder stands or ought to stand on its own. You don’t approach the court devoid of evidence hoping to have the accused, who is presumed to be innocent, to support your claim. It would have been irrelevant in any competent court what I pleaded or not for a judge to determine a dispute. It was SMM as Plaintiff’s case that a scheme was devised that led to a real exchange of funds from SAS to Petter and therefore in terms of rules of natural justice, he who alleges has the onus to prove his case.
When the claim was formulated, ENSafrica was obliged to verify the basis of the claim and as an officer of the court, their obligation ought to have been to the court, and not to the client to assist the court to make a just and equitable finding based on facts and not hearsay.
That is the reason Sanangura has approached the court so that SMM and its legal representatives have now an opportunity to provide the facts that led to formulation of a claim.
Q: Also, there is a claim that SMM was heavily indebted to Petter Trading for equipment supplies. Why didn’t the joint liquidator of Petter – Mr Harry Kaplan – testify to this during the trial? In addition, why didn’t the liquidators pursue this claim during liquidation?
A: Nothing turns or ought to turn on whether Mr Kaplan testified or not. The dispute before Justice Willis was brought about by SMM.
Before approaching any court, SMM knew and ought to have known of its indebtedness to Petter. The obligation to approach the court with clean hands was vested with SMM.
However, at no stage did and does SMM acknowledge this indebtedness. One then is led to enquire as to why SMM needed Kaplan or the joint liquidators to authenticate that which was known and existed before the commencement of the case?
Whether Kaplan testified or not, the facts of the matter should stand on their own. Either SMM was indebted to Petter or not? If SMM was indebted to Petter, then the Justice Willis judgment was tainted by material concealment.
This is so, because the reason for the cession agreement would have been self-evident and the role of SMM and the RBZ in causing it.
You will be aware that the reconstruction law creates not a company but a strange corporate animal; and in addition, you will note that in terms of the operation of this strange law, Petter is deemed to be an associate of SMM and therefore also under the control of Gwaradzimba and any legal claim against SMM fails because in terms of the Act, Petter cannot approach any Zim court without leave of the Administrator.
Please read the Act and see the absurdity.
Q: It seems you are not happy with the conduct of both Justice Willis and SMM’s attorney’s during the trial. Do you believe that they were biased, venal and unprofessional during the trial?
A: I am sure you can see through this matter. A judge ought to be guided by evidence. You would also expect lawyers to be neutral and honest.
I was not a director of SAS and Petter at the material time yet a judge makes a finding that I was after having accepted as common cause in the same judgment that I had no fiduciary nexus with the relevant companies.
You are also aware that at the core of the dispute is the allegation that as a matter of fact, I was not a director and an authorised signatory of SAS during May through December 2004 to allow me to know and cause any harm yet I was cited as a First Defendant for what can be described as ulterior motives.
I was not an officer of SAS and Petter to know better. I was also not a direct shareholder of SMM, Petter and SAS.
The facts speak for themselves.
Imagine someone accusing you of murder without anyone missing let alone a dead body.
What kind of human being would create facts of injury without evidence?
Q: We understand that you raised a complaint with the South African Judicial Service Commission (JSC) in 2012 on the conduct of Justice Willis. Did you get a response from them?
A: Yes, I did get a response. The response failed to speak to the facts of the matter and the conduct of Justice Willis on this matter.
I have no doubt that Justice Willis’s mind is and cannot be at ease over this matter.
If he is a man of conscience, I have no doubt that he is not sleeping knowing what you and I know about the facts.
Q: In paragraph 24 of your letter to the JSC, you intimate that your problems are mainly because you “became a target of the Zimbabwe government” after failing to take up a position in Zanu-PF. Do you still stand by this claim?
A: Yes, I stand by the statement.
Q: So, where do you go from here?
A: I am sure you will agree that the truth will always triumph. The matter is before the court and I should like to believe that no one stands to be prejudiced by the truth. I am also sure that if Sanangura was the signatory of an agreement that has been found to be invalid and fraudulent, then it can never be said that justice can never be subordinated to time and convenience.
He is now in court and let justice and equity be the guide. What I do know is that the people who have abused and continue to abuse the justice system will have their day and the truth is not perishable.
