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Zimbabwe businessmen face US$1.4 Million fraud charges over property scam
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Two prominent businessmen from Harare, Satishbhai Patel, 60, director of Honda Centre, and Ebrahim Mahomad, 57, director of Union Hardware, have been arrested and charged with fraud amounting to US$1.4 million. They appeared in court last week, facing accusations of contravening Section 136 of the Criminal Law (Codification and Reform) Act chapter 9:23.
The complainant in the case, Meadow Sweet Investments (Private) Limited, represented by Nyasha Emmanuel Watyoka, alleges that the duo conspired to sell a partially developed property located at stand number 3081 in Salisbury township, Harare, without proper authorization.
The State's case outlines that Meadow Sweet Investments purchased the land, which had been developed to a double-storey level, in 2002 from John Dimitriou Mallis and Myrsina Myrtoula Dimitriou. The deed of transfer was registered in the name of Meadow Sweet Investments (Pvt) Ltd. Following the acquisition, the complainant intended to renovate the structure into an office complex; however, in 2004, all the directors left Zimbabwe, resulting in no progress on the property.
In 2011, with the property lying idle, Patel and Mahomad allegedly devised a scheme to defraud Meadow Sweet Investments. The pair purportedly drafted a special resolution claiming that Patel was a director of the complainant's company, which empowered him to sell the property on its behalf.
It is further alleged that they created a power of attorney, granting authority to fugitive Cuthbert Chengeta to transfer the property to the Zimbabwe Energy Regulatory Authority (ZERA). The accused eventually sold the property to ZERA under these fraudulent pretenses.
In 2023, one of the directors of Meadow Sweet Investments, Dr. Muchazoreka Richardson Nyamugama, returned to Zimbabwe intending to develop the property. To his shock, he discovered that the site had been renovated and was already in use by ZERA. Upon further inquiry, Dr. Nyamugama found that the property had been transferred into ZERA’s name through the power of attorney signed by Patel.
The State asserts that Meadow Sweet Investments never authorized the sale and that Patel was never a director of the company as claimed. Additionally, the Zimbabwe Revenue Authority (ZIMRA) indicated that the capital gains tax certificate presented to the Registrar of Deeds during the transfer process was not authentic and was not recorded in their systems.
Prosecutors allege that Patel and Mahomad had no legal right to conduct the sale, resulting in a loss of US$1.4 million for the complainant, with no recovery of the funds reported so far.
The case highlights significant issues of corporate governance and fraud within Zimbabwe’s business environment, drawing attention to the need for stricter regulations and oversight in property transactions. As the legal proceedings unfold, it remains to be seen how the accused will respond to these serious allegations.
The complainant in the case, Meadow Sweet Investments (Private) Limited, represented by Nyasha Emmanuel Watyoka, alleges that the duo conspired to sell a partially developed property located at stand number 3081 in Salisbury township, Harare, without proper authorization.
The State's case outlines that Meadow Sweet Investments purchased the land, which had been developed to a double-storey level, in 2002 from John Dimitriou Mallis and Myrsina Myrtoula Dimitriou. The deed of transfer was registered in the name of Meadow Sweet Investments (Pvt) Ltd. Following the acquisition, the complainant intended to renovate the structure into an office complex; however, in 2004, all the directors left Zimbabwe, resulting in no progress on the property.
In 2011, with the property lying idle, Patel and Mahomad allegedly devised a scheme to defraud Meadow Sweet Investments. The pair purportedly drafted a special resolution claiming that Patel was a director of the complainant's company, which empowered him to sell the property on its behalf.
In 2023, one of the directors of Meadow Sweet Investments, Dr. Muchazoreka Richardson Nyamugama, returned to Zimbabwe intending to develop the property. To his shock, he discovered that the site had been renovated and was already in use by ZERA. Upon further inquiry, Dr. Nyamugama found that the property had been transferred into ZERA’s name through the power of attorney signed by Patel.
The State asserts that Meadow Sweet Investments never authorized the sale and that Patel was never a director of the company as claimed. Additionally, the Zimbabwe Revenue Authority (ZIMRA) indicated that the capital gains tax certificate presented to the Registrar of Deeds during the transfer process was not authentic and was not recorded in their systems.
Prosecutors allege that Patel and Mahomad had no legal right to conduct the sale, resulting in a loss of US$1.4 million for the complainant, with no recovery of the funds reported so far.
The case highlights significant issues of corporate governance and fraud within Zimbabwe’s business environment, drawing attention to the need for stricter regulations and oversight in property transactions. As the legal proceedings unfold, it remains to be seen how the accused will respond to these serious allegations.
Source - newzimbabwe
