Chivayo's estate faces US$5.1m car dealer debt

Three major Harare car dealerships are reportedly owed a combined US$5.1 million by the late businessman Wicknell Chivayo, raising questions about the financial arrangements behind his high-profile luxury vehicle giveaways.

According to sources familiar with the transactions, Exquisite Cars, Enterprise Car Sales and Faramatsi Motors are among the creditors seeking to recover money linked to vehicles supplied to the businessman.

Faramatsi Motors reportedly has the largest outstanding balance at US$2.4 million, followed by Exquisite Cars, owned by Victor Vikela, at US$1.4 million, and Enterprise Car Sales, owned by Tendai Chipanga, at US$1.3 million.

Chivayo, a prominent Zanu PF financier, died alongside his wife, Lucy, in a helicopter crash near Marondera on September 30.

He was widely known for publicising luxury vehicle and cash giveaways to individuals and institutions, particularly churches. His publicly declared gifts exceeded US$50 million, although he claimed to have given away more than US$100 million.

A source familiar with his dealings with the dealerships said Chivayo operated under credit arrangements that allowed him to take vehicles and settle the bills later, typically within three months.

"Most of his income came from the government. So these payments to the car dealers followed cycles of disbursements by the treasury, and the car dealers were comfortable with their arrangement," the source said.

Vikela declined to discuss the details of his dealings with Chivayo, citing their relationship and respect for the late businessman's legacy. However, he disputed the reported figures as greatly exaggerated and said whatever Chivayo owed his business had been written off.

Faramatsi Motors owner Matsika, who also owns Doves Funeral Services, declined to discuss the transaction, citing client confidentiality. Chipanga could not be reached for comment.

The reported debts come as Chivayo's family prepares to appoint an executor to administer his estate, which could involve resolving outstanding liabilities and establishing the status of property holdings and business interests.

South African car dealers who reportedly released vehicles before receiving full payment are also said to be seeking recoveries from the estate. Some vehicles remain at the Beitbridge border post because customs duty had not been fully paid.

Chivayo held government contracts worth nearly US$1 billion through his companies IMC Communications, Intratrek and TTM Global Medical Exports. The future of the businesses remains uncertain following his death, given his central role in their operations and government dealings.

He was also believed to have completed the purchase of a property in England valued at US$12 million days before his death. He had previously spoken about owning properties in Dubai, Eswatini, Johannesburg and Cape Town.

Meanwhile, his Gulfstream G550 private jet, which he valued at US$34 million, reportedly left Zimbabwe on Sunday and landed in Basel, Switzerland. It remains unclear who authorised the aircraft's movement or the arrangements under which it was repositioned.

One of the key issues facing the estate's administrators will be determining whether high-value assets were fully paid for or remain subject to outstanding purchase agreements and other claims.

A prominent property under scrutiny is Chivayo's mansion in Harare's Gletwyn suburb, which sits on four adjoining stands covering a combined 11.5 hectares.

According to a 2017 sale agreement, Chivayo agreed to buy the property from former police commissioner-general Augustine Chihuri for US$2.555 million. The agreement required an initial payment of US$1 million, with the remaining US$1.555 million due within a year.

The contract stipulated that failure to settle the balance within that period would render the agreement "null and void and of no effect."

Transfer of ownership from Chihuri's True Hope Trust to Chivayo's WMC Family Trust was conditional on payment of the full purchase price, transfer fees, stamp duty and obligations to the Zimbabwe Revenue Authority (Zimra).

However, the transaction reportedly encountered difficulties over the property's tax valuation.

A lawyer familiar with the transaction said Zimra valued the property at US$7 million for capital gains tax purposes. At the applicable rate of 20 percent, the tax liability would amount to US$1.4 million on that valuation.

Chihuri reportedly objected to the tax burden because the agreed purchase price was substantially below Zimra's valuation. Chivayo is said to have offered to cover the tax, but the transfer was never completed.

The mansion's ownership and the status of the sale agreement could now become matters for the estate's executor to resolve. A legal expert said Chihuri could seek to reclaim the property, potentially arguing that Chivayo's part-payment should be treated as rent rather than a deposit towards the purchase.

The reported dealership debts and unresolved property transaction illustrate the complex financial and legal questions that may confront the administration of Chivayo's estate.