GMB bosses challenge prosecution over $1m fraud

 

HARARE - $1 million fraud charges have challenged a State decision to prosecute them arguing they should not be indicted in their individual capacities.

Korbs Kobie Mutandiro, Basilio Sandamu and Taona Munzvandi made an application for exception to fraud charges on the basis the State grain utility they represented should have been charged.

They appeared before Harare regional magistrate Lucy Mungwari yesterday. 

A ruling on their application will be passed this Thursday.

Prosecutor Michael Reza argued that the trio’s application was misplaced because it was the State’s prerogative to decide who to prosecute when seized with a matter.

He said according to section 362 (3) (v) of the Criminal Procedure and Evidence Act, a company’s representative could also be charged in their personal capacity.

“…the citation of a director or employee of a corporate body to represent that corporate body in any criminal proceedings instituted against it shall not exempt that director or employee from prosecution for that offence in personal capacity,” Reza said, quoting the Act.

Reza said Mutandiro and his accomplices had made similar applications before various other courts to no avail.

“The fiction of the separate corporate personality cannot be taken too far. There are occasions when the court is entitled to peer behind the façade of a fictitious separate legal person…some of these are if corporate personality is being used for fraud or illegal purpose,” Reza said.

According to the State, sometime in the late 90s, the government embarked on the Land Reform Programme which involved compulsory acquisition of land for re-distribution.

In terms of the Land Acquisition Act Chapter 20:10 and through an extraordinary Government Gazette general notice 591 of 2001, a notice was given to acquire Romany Farm under deed of transfer number 5421.

It was registered under Romany Farm (Pvt) Ltd measuring 197,37 hectares.

It was alleged that on April 30, 2013, Munzvandi, allegedly in connivance with Mutandiro and Sandamu, hatched a plan to defraud the GMB Fund.

The court heard that Munzvandi and Mutandiro entered into an agreement-of-sale of the said farm to GMB Pension Fund for $2,5 million knowing that the farm had been acquired by the State.

Acting on the misrepresentation, GMB Pension Fund transferred 

$1 040 000 into Organs Resources (Pvt) Ltd’s Standard Chartered Bank corporate account where Mutandiro is the director and signatory to the bank account.

As a result, GMB Pension Fund was prejudiced $1 040 000 and nothing was recovered.