News / National
Chivayo, Intratrek acquitted of defrauding ZPC
13 Mar 2023 at 17:45hrs | Views
Maverick Harare businessman Wicknell Chivayo and his company Intratrek Zimbabwe have been acquitted of defrauding the Zimbabwe Power Company (ZPC) of US$5.8 million.
In a judgement handed down on Monday, Harare regional magistrate Lanzini Ncube granted Chivayo and Intratrek's application for refusal for further remand at the close of the state case.
Consequently, Chivayo and Intratrek were found not guilty and acquitted of all four counts of fraud, money laundering, violation of exchange control regulations and confiscation of profits due to lack of evidence.
Chivayo and Intratrek were facing three counts of fraud, while the other two counts of breaching exchange control regulations and money laundering suffered a stillbirth shortly before the trial commenced.
The court found that Chivayo and his company had not committed any criminal offences but participated and won a public tender that was advertised and available for everyone to bid. The state required of him to answer to charges pertaining to the 100MW Gwanda solar power project, in particular in alleging that he failed to perform in terms of the contract and thereby committed an act of fraud against ZPC.
Magistrate Ncube said it was not in dispute that between 2016 and 2019 Intratrek executed the pre-commencement works as agreed under Schedule 11 of the EPC Contract. These works were executed utilising funds paid by ZPC under contract and in the sum of USD$5,811,224. This amount constitutes less than 5 percent of the contract price of US$172,848 597.
Here is what the magistrate said: "Whilst I recognise the State's prerogative to bring criminal complaints and charges against individuals, the law demands that same must be on the basis of reasonable suspicion and on probable cause.
"It the High Court civil suit in which Intratrek won against ZPC, the complainant denied ever instituting a criminal suit against Chivayo and his company. 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 jurist) who should complain of criminal conduct of the accused persons.
"It invites confusion and uncertainty on how the state formulated these charges preferred against the accused persons if the known complainant has denied ever instituting the same. The State on June 30, 2022, through cabinet which is the highest decision-making body in the executive, the first arm of government, has already ordered that the contract between the accused persons and ZPC is valid and must be carried into effect. The pronouncements from cabinet are public knowledge hence the approval and endorsement for parties to continue with the project in issue.
"There can neither be reasonable suspicion nor probable cause on which accused persons can therefore be brought to court. There was no misrepresentation, prejudice nor fraud establishing any criminal charge against them.
"The criminal charges preferred against the accused persons are expiable as they do not disclose any criminal act that warrants the adjudication of our criminal justice system. The cause of action arises from a contractual arrangement between accused persons and ZPC, which arrangement provides for all the applicable remedies in the event of breach, whether actual or perceived.
"On a charge of fraud, the intention to deceive must exist at the time that the misrepresentation is made. In this case, such intention must be alleged to have existed on each of the dates on which invoices were presented to ZPC for payment. The non-existence of such intention immediately becomes apparent if one considers that the relationship between the parties was regulated by an Engineering Procurement and Construction Contract (EPC) which authorised payment before works had been done. Consequently, the allegations are neither founded upon nor do they meet the essential requirements of the crime of fraud as defined in the Criminal Law (Codification and Reform) Act [Chapter 9:23].
"The conduct complained against for both accused persons as constituting fraud is frivolous and cannot be supported by the factual circumstances under which the amount of USD$5,811,224 was utilised. There is uncontroverted evidence which proves that the entire amount paid by ZPC was utilised in accordance with the requirements of the EPC Contract.
"The comprehensive report on the evaluation of the pre-commencement works which was jointly carried out and ratified by ZPC and accused persons on July 13, 2020, is clear. The importance of this evaluation report confirms that accused persons not only discharged their contractual mandate in full with respect to the pre-commencement works, but went further to utilise their own resources to complete some of the required works.
"The report vindicates them from all the unfounded allegations that they short-changed or in the least, defrauded ZPC. Contrary to the misleading narrative as suggested in the state outline, the report confirms that as at July 13, 2020, ZPC owed Intratrek the sum of US$609,693.87 arising from works which have been over delivered. The acceptance by ZPC that the accused over delivered on its obligations in accordance with the EPC contract and utilised the advance payment for pre-commencement activities places beyond any reasonable doubt that no party was defrauded.
"It escapes the mind how the charge of fraud can be sustained as arising from the foregoing circumstances. All payments made by ZPC were advance payments, they were authorised by the contractual document. The intention by both parties as expressed in the contract was that works would be done after the payments. That negates the intention on the part of the accused persons to cause any prejudice to ZPC.
"It would be indeed a sad day for both justice and the economy of Zimbabwe to allow for untenable and fruitless prosecution of entities that should otherwise be advancing the national interest of the country without any sound or legal basis to do so. The complainant is a private company owned by the State, like the accused persons it must have the same rights and liabilities. The law is that whenever the State or its affiliate enters into a contract, it must be treated equally as the other party to the contract. It must find its remedies and/or incur its liabilities in terms of the contract.
"The contract must be the beginning and the end in resolving whatever dispute that might arise between the parties. While grappling with power shortages stretching up to 16 hours of load shedding, the importance of the 100MW Gwanda Solar Project to the nation of Zimbabwe can therefore not be over emphasised. Achieving energy self-sufficiency lies at the core of government's drive to make Zimbabwe an upper middle income economy by 2030.
"Renewable energy and the guarantee of its availability dovetails and anchors the objectives under the National Development Strategy 1 and 2, which are economic blueprints of the Second Republic. I regrettably find the instigation of criminal proceedings as spurious and no court exercising its mind properly can convict. Accordingly, I hereby find both accused persons not guilty and acquitted on all five counts."
Chivayo and Intratrek Zimbabwe were represented by Advocates Lewis Uriri and Sylvester Hashiti respectively, both instructed by Wilson Tatenda Manase of Manase & Manase Legal Practitioners. Tafara Chirambira and Tendayi Shonhayi appeared for the National Prosecuting Authority.
In a judgement handed down on Monday, Harare regional magistrate Lanzini Ncube granted Chivayo and Intratrek's application for refusal for further remand at the close of the state case.
Consequently, Chivayo and Intratrek were found not guilty and acquitted of all four counts of fraud, money laundering, violation of exchange control regulations and confiscation of profits due to lack of evidence.
Chivayo and Intratrek were facing three counts of fraud, while the other two counts of breaching exchange control regulations and money laundering suffered a stillbirth shortly before the trial commenced.
The court found that Chivayo and his company had not committed any criminal offences but participated and won a public tender that was advertised and available for everyone to bid. The state required of him to answer to charges pertaining to the 100MW Gwanda solar power project, in particular in alleging that he failed to perform in terms of the contract and thereby committed an act of fraud against ZPC.
Magistrate Ncube said it was not in dispute that between 2016 and 2019 Intratrek executed the pre-commencement works as agreed under Schedule 11 of the EPC Contract. These works were executed utilising funds paid by ZPC under contract and in the sum of USD$5,811,224. This amount constitutes less than 5 percent of the contract price of US$172,848 597.
Here is what the magistrate said: "Whilst I recognise the State's prerogative to bring criminal complaints and charges against individuals, the law demands that same must be on the basis of reasonable suspicion and on probable cause.
"It the High Court civil suit in which Intratrek won against ZPC, the complainant denied ever instituting a criminal suit against Chivayo and his company. 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 jurist) who should complain of criminal conduct of the accused persons.
"It invites confusion and uncertainty on how the state formulated these charges preferred against the accused persons if the known complainant has denied ever instituting the same. The State on June 30, 2022, through cabinet which is the highest decision-making body in the executive, the first arm of government, has already ordered that the contract between the accused persons and ZPC is valid and must be carried into effect. The pronouncements from cabinet are public knowledge hence the approval and endorsement for parties to continue with the project in issue.
"There can neither be reasonable suspicion nor probable cause on which accused persons can therefore be brought to court. There was no misrepresentation, prejudice nor fraud establishing any criminal charge against them.
"The criminal charges preferred against the accused persons are expiable as they do not disclose any criminal act that warrants the adjudication of our criminal justice system. The cause of action arises from a contractual arrangement between accused persons and ZPC, which arrangement provides for all the applicable remedies in the event of breach, whether actual or perceived.
"On a charge of fraud, the intention to deceive must exist at the time that the misrepresentation is made. In this case, such intention must be alleged to have existed on each of the dates on which invoices were presented to ZPC for payment. The non-existence of such intention immediately becomes apparent if one considers that the relationship between the parties was regulated by an Engineering Procurement and Construction Contract (EPC) which authorised payment before works had been done. Consequently, the allegations are neither founded upon nor do they meet the essential requirements of the crime of fraud as defined in the Criminal Law (Codification and Reform) Act [Chapter 9:23].
"The conduct complained against for both accused persons as constituting fraud is frivolous and cannot be supported by the factual circumstances under which the amount of USD$5,811,224 was utilised. There is uncontroverted evidence which proves that the entire amount paid by ZPC was utilised in accordance with the requirements of the EPC Contract.
"The comprehensive report on the evaluation of the pre-commencement works which was jointly carried out and ratified by ZPC and accused persons on July 13, 2020, is clear. The importance of this evaluation report confirms that accused persons not only discharged their contractual mandate in full with respect to the pre-commencement works, but went further to utilise their own resources to complete some of the required works.
"The report vindicates them from all the unfounded allegations that they short-changed or in the least, defrauded ZPC. Contrary to the misleading narrative as suggested in the state outline, the report confirms that as at July 13, 2020, ZPC owed Intratrek the sum of US$609,693.87 arising from works which have been over delivered. The acceptance by ZPC that the accused over delivered on its obligations in accordance with the EPC contract and utilised the advance payment for pre-commencement activities places beyond any reasonable doubt that no party was defrauded.
"It escapes the mind how the charge of fraud can be sustained as arising from the foregoing circumstances. All payments made by ZPC were advance payments, they were authorised by the contractual document. The intention by both parties as expressed in the contract was that works would be done after the payments. That negates the intention on the part of the accused persons to cause any prejudice to ZPC.
"It would be indeed a sad day for both justice and the economy of Zimbabwe to allow for untenable and fruitless prosecution of entities that should otherwise be advancing the national interest of the country without any sound or legal basis to do so. The complainant is a private company owned by the State, like the accused persons it must have the same rights and liabilities. The law is that whenever the State or its affiliate enters into a contract, it must be treated equally as the other party to the contract. It must find its remedies and/or incur its liabilities in terms of the contract.
"The contract must be the beginning and the end in resolving whatever dispute that might arise between the parties. While grappling with power shortages stretching up to 16 hours of load shedding, the importance of the 100MW Gwanda Solar Project to the nation of Zimbabwe can therefore not be over emphasised. Achieving energy self-sufficiency lies at the core of government's drive to make Zimbabwe an upper middle income economy by 2030.
"Renewable energy and the guarantee of its availability dovetails and anchors the objectives under the National Development Strategy 1 and 2, which are economic blueprints of the Second Republic. I regrettably find the instigation of criminal proceedings as spurious and no court exercising its mind properly can convict. Accordingly, I hereby find both accused persons not guilty and acquitted on all five counts."
Chivayo and Intratrek Zimbabwe were represented by Advocates Lewis Uriri and Sylvester Hashiti respectively, both instructed by Wilson Tatenda Manase of Manase & Manase Legal Practitioners. Tafara Chirambira and Tendayi Shonhayi appeared for the National Prosecuting Authority.
Source - zimlive
