Court rebukes RBZ, lifts US$7m freeze

The High Court has ruled in favour of Al Shams Global Ltd, setting aside a Reserve Bank directive that froze US$7 million and delivering a sharp rebuke of the central bank's handling of the matter.

In a judgment handed down last week, Justice Joseph Mafusire declared the decision by the Reserve Bank of Zimbabwe unlawful, irrational and procedurally flawed, ordering the immediate lifting of the account suspension and directing the bank to pay legal costs.

The dispute centred on US$7 million held in an account linked to Fidelity Gold Refinery at GetBucks Microfinance Bank, which the central bank froze in July 2025 citing concerns over the source of funds.

However, the court found no legal or procedural basis for the action, particularly given the long-standing financial relationship between the parties. Justice Mafusire criticised the central bank's conduct as "irrational and arbitrary," noting inconsistencies in its position regarding the origin of the funds.

Evidence presented showed that Al Shams Global Ltd, fronted by businessman Jayesh Shah, had injected US$12.1 million into Zimbabwe in two tranches, declaring the funds in line with exchange control regulations. The court questioned why only US$7 million was subjected to scrutiny, describing the distinction as illogical.

The judgment also highlighted that the Reserve Bank had historically relied on the company as a source of foreign currency inflows during periods of economic strain, making its later suspicion of the same funding channels inconsistent.

Justice Mafusire further ruled that the central bank failed to comply with the Administrative Justice Act, citing a lack of proper notice, failure to provide adequate reasons, and denial of an opportunity for the applicant to respond before the account was frozen.

Compounding the case, an affidavit submitted by the central bank governor was struck out after it was found to have been improperly commissioned outside the country, rendering it invalid. The court dismissed it as inadmissible, stating that legal arguments could not substitute sworn evidence.

The judge also rejected attempts to justify procedural shortcomings through claims of modernisation, affirming that existing legal requirements remain binding.

In a broader finding, the court held that the Reserve Bank had overstepped its mandate by effectively assuming the role of the Financial Intelligence Unit, which is legally responsible for handling suspicious transaction reports.

While ruling decisively in favour of Al Shams Global Ltd, the court declined to impose punitive costs, noting that although the central bank's actions were flawed, they did not amount to gross misconduct.

The ruling marks a significant legal setback for the central bank and raises broader questions about regulatory conduct, due process and investor confidence in Zimbabwe's financial system.