The five accused persons were charged with criminal abuse of duty as public officers as defined in section 174 of the Criminal Law (Codification and Reform) Act [Chapter 9:23].
The allegations against them were that between 3-23 May 2017, at ZINARA, the five accused had unlawfully, and in common purpose with each other, in the exercise of their functions and contrary to their duties as public officers, engaged third party companies to source foreign currency on the informal market on behalf of ZINARA.
This was in their capacities as Finance Director, Finance Manager, Accountant, Regional Engineer North, and Director Administration and Human Resources of ZINARA.
The companies in question whom they were said to have sourced were Access Finance (Pvt) Ltd, Grayriver (Pvt) Ltd, and Caudless Trading (Pvt) Ltd.
The five accused were said to have made payments amounting to US$2,940,558=69 to these three companies as consideration towards the servicing of a loan owed by ZINARA to the Development Bank of Southern Africa (DBSA) without authority of ZINARA Board of Directors for the purpose of showing favour to these three companies.
The first accused, Simon Mudzingwa Taranhike is the Finance Director of ZINARA. The second accused, Shadreck Matengabadza is the Finance Manager. The third accused, Stephen Matute, is the Accountant. The fourth accused, Givemore Tendai Kufa, is the Regional Engineer North, whilst the fifth accused, Precious Murove, is the Director Administration and Human Resources of ZINARA.
Each pleaded not guilty to the charge.
Their core defence was that the payments were not made on behalf of ZINARA but on behalf of Infralink (Pvt) Ltd (Infralink), and that, as such, ZINARA lacked locus standi in the matter.
Their resultant standpoint was that they could not have abused their duties as public officers when they were transacting on behalf of the private company.
Furthermore, they argued, that, in view of the circumstances surrounding the payment of the monies in settlement of the loan, the ZINARA Board itself, through its lawyers, had since withdrawn charges.
Additionally, they asserted that the payments made were with the full knowledge of the Chief Executive Officer (CEO) of ZINARA at the time they were made, and that, in any event, they had acted with the full mandate of their principal - Infralink.
They also drew attention, in their defence, to the letter written to the National Prosecuting Authority by their lawyers on behalf of the ZINARA Board, prior to the commencement of the trial.
The letter highlighted that the Board was never appraised of the criminal charges against its officers. Furthermore, there was no Board resolution from ZINARA authorising anyone to institute a criminal report. It additionally highlighted that ZINARA and Infralink are, at law, two separate legal entities and that ZINARA had no locus standi.
The letter equally emphasised the context under which the payments had been made, and, in particular, the dire contractual consequences of failure to pay. It concluded that:
“The ZINARA Board fully accepts that it is lawfully bound to assist the National Prosecution Authority in combating corruption and criminal conduct and would not spare any effort or resource in supporting the prosecution of a deserving case. However, the ZINARA Board's impartial consideration of the facts at hand has prompted the need to alert the National Prosecuting Authority on the needless damage that may arise to the standing of ZINARA in circumstances where, in its view, no palpable wrong was done.”
The State took a different view.
It proceeded on the basis of being the dominus litis, and, that, the accused persons had a case to answer.
The Background
The Government of Zimbabwe, through the Ministry of Finance and the Ministry of Transport, obtained a loan from the Development Bank of Southern Africa (DBSA) in 2011 for the sum of US$206 million. This was to be used in rehabilitating the road from Plumtree to Mutare.
ZINARA, which is a statutory entity involved in road maintenance, was the Ministry of Transport's nominee.
A private company called Infralink (Pvt) Ltd was formed as a special purpose vehicle for implementing the agreement and for receipt and remittance of the funds for repayment purposes.
ZINARA is a 70% shareholder and Group Five, a private entity, is a 30% shareholder in Infralink.
The latter nominated NMB Bank as the Bank through which repayment of the loan was to be made.
For purposes of servicing the loan, ZINARA ring-fenced certain revenue streams and toll gate collections on the Plumtree-Mutare road. It would collect this money for onward transmission to Infralink. In turn, Infralink would service the loan with the Development Bank of Southern Africa (DBSA).
This worked until foreign currency became a challenge in Zimbabwe.
Although bond notes were deposited into the account, these only operate within Zimbabwe. ZINARA began to experience serious challenges in remitting foreign currency to Infralink. NMB which was Infralink's bank, was unable to assist in securing the scarce resource. The result was that Infralink soon plummeted into unstainable repayment arrears as the debt continued to mount and mount.
It was against this background that the five accused persons are said to have used illegal means to service the debt in that they had sought to use companies outside the country to use their own monies whilst being reimbursed here in Zimbabwe at a premium.
THE STATE EVIDENCE
Judith Kateera, who was the then Permanent Secretary in the Ministry of Finance and a Board member of ZINARA as well as chairperson of its Finance Committee, gave evidence.
According to her, at a meeting on 22 March 2017, the Finance Director, the first accused in this matter, had brought it to the Committee's attention that the loan obtained by ZINARA from the Development Bank of Southern Africa (DBSA) had accumulated arrears of US$14.5m and was attracting penalties of 200% over the 6% annual rate.
At a third Finance Committee meeting, held on 12 June 2017, the arrears had accumulated to US$21m.
The Finance Director reported, at that meeting, that, the Reserve Bank of Zimbabwe had only availed US$2.5m for purposes of repaying the arrears. Concerns had been raised that the debt was unsustainable and would threaten the very existence of ZINARA.
It was at this meeting that the first accused person had proposed that permission be granted to approach those on the market who could help extinguish the debt.
As chairperson of the Committee, her response had been that this would contravene the Money Laundering Act. The resolution, according to this witness, was that the Ministry of Transport, as the parent body, was to be approached for them to further engage the Ministry of Finance and the Reserve Bank of Zimbabwe. She had subsequently learnt of the unauthorised payment to Grayriver (Pvt) Ltd when the police approached her.
Albert Mugabe, who was then the chairperson of the ZINARA Board, told the court that the issue of the repayment of the loan was a regular issue on the ZINARA Board agenda.
He confirmed the challenges that NMB Bank had encountered in procuring US dollars despite the account being populated with bond notes. It was under these circumstances that the US dollars had been obtained outside the normal bank structures and used to service the runaway debt although the Board, which had oversight over polices, had not authorised the sourcing of foreign currency from third parties.
He agreed, in cross examination, that, making the payment did indeed relieve ZINARA of some of the penalties and that he would therefore not be surprised if the executive had sought ways to reduce the burden on ZINARA. He was not aware of any personal benefits that any of them had received.
Nancy Masiyiwa, the CEO of ZINARA, told the court that she had assumed office as head of ZINARA in September of 2016.
She described the core Executive team at ZINARA as consisting of herself, the director of finance, the human resources director, the technical director, and the corporate secretary. She is the one who chairs the Executive. The Executive reports to the Board of Directors. The CEO is the one who prepares the agenda for the Board and also presents the ZINARA report from the executive to the Board.
In terms of the actual day to day working structure between ZINARA and Infralink she highlighted that the chairperson of the ZINARA Board is also the chairperson of the Infralink Board and the corporate secretary for ZINARA is also the corporate secretary for Infralink. She further explained that the CEO of ZINARA is also the CEO of Infralink and that the financial director for ZINARA is also the same for Infralink. Group Five, Infralink's counterpart, has two representatives on the Infralink Board.
Amongst the accused persons, only the Finance Director sat on the Infralink Board.
She also highlighted, that, in reality, the Infralink Board rarely met as Infralink, and, if there were issues to be discussed, these were discussed by way of round robin.
Regarding the loan to the Development Bank of Southern Africa (DBSA) which was to be paid by Infralink through funds received from ZINARA, it would generally be discussed by the Executive within ZINARA where the Finance Director would give an update. It would also be discussed by the ZINARA Board.
According to her testimony, the Infralink Board rarely met as a Board. The overlapping Board members had gone to South Africa as Infralink Board members to discuss the restructuring of the loan sometime in March 2017.
She confirmed that, in June, the Finance Committee had indeed shot down the proposal to pursue foreign currency on the open market.
She told the court that the schedule of payments made by the accused was only brought to her attention when the serious fraud squad engaged her in June. Her evidence was that these payments should have been escalated to her office.
Whilst she admitted having asked the Finance Director, at the beginning of that year, to engage innovative thinking in raising funds to pay the debt, she had not said procedures should not be followed. She was unable to comment on whether the accused persons had received any benefits.
Patrick Takawira, the Treasure Director at FBC Bank, who was introduced to the second accused, Shadreck Matengabadza, by Mr Njanji from CBZ, which was ZINARA's bank, also gave his evidence. Its gist was that he, in turn, had introduced the two to Dr Hokonya, a business consultant who knew people who could pay in foreign currency outside the country and had capacity to assist.
Dr Hokonya, who had sourced the companies that were able to pay in rands confirmed that he had been introduced to the second accused, who, on behalf of ZINARA, had confirmed that they were looking for people who could effect payment on their behalf outside the country.
He had also received confirmation from the second accused that the Development Bank of Southern Africa (DBSA) in South Africa were agreeable to payments being made in rands in South Africa.
Solarwatts had been sourced to make the payment. It needed a receiving account in Zimbabwe to receive the payment from ZINARA. Solarwatts had indicated that the payment was to be made to a company known as Grayriver (Pvt) Ltd and had provided an account for it held at CBZ.
Solarwatts was supposed to pay an equivalent of US$250,000 to the Development Bank of Southern Africa (DBSA) on behalf of Infralink. This they had purportedly done in South Africa and ZINARA, in return, paid $300,000 into the Grayriver CBZ account here in Zimbabwe.
According to this witness, the other $50,000 was for commission from which he was to have received $25,000 as introduction fees. He told the court that he had paid his assistant, Chandler Moyo, whom he worked with, a sum of US$12,500 but had been unable to get his US$12,500 as the account had been subsequently frozen soon thereafter.
Chandler Moyo's evidence did not add much other than confirming that he did indeed assist Dr Hokonya in relaying information to and from the various players. He also revealed, that, after being paid his $12,500 the second accused had taken a loan of $2,500 from him which he had repaid.
Mr Shadreck Chezani, the investigation officer, was the final State witness.
He told the court that the matter had been anonymously reported to the police in May 2017. Interviews had thereafter been carried out at ZINARA and had established that something was not proper. A successful application to freeze the Grayriver account had been made. The investigation unearthed that four transactions had been made from the Grayriver account following the payment into the account of $300,000. Investigations had also established that the withdrawals had been fast and furious.
Besides the $12,500 paid to Chandler Moyo, a person purporting to be Honest Kugotsi had also made withdrawal. They had established that the particulars of the real Honest Kugotsi had been used and that the real person had nothing to do with the matter.
About $14,000 and another $60,000 had been used to purchase goods using his name.
Another fictitious person named Mckenzie had also withdrawn from the account. A fourth transaction involving $40,000 had also been made impersonating one of the directors of Grayriver (Pvt) Ltd, Magaisa Sobuza, who had in fact died in 2014.
He told the court that a total of $131,000 had been spirited away by the time the account was frozen and that the remainder of the amount remains frozen in the account.
Whilst a Munyaradzi Paraiwa had stepped forward to lay claim, the police had been unable to get hold of a person by that name at the address given.
Importantly, whilst a company called Grayriver (Pvt) Ltd does exist, the Investigating Officer explained that the account had initially been opened by one Collins Mupimbo who had been given certain documents by Mr Bruce Michael Blake from Grayriver in their business dealings to assist with opening an account for Grayriver at CBZ. The account had been opened. However, Mr Blake of Grayriver had discovered, some two weeks prior, that he could not use the account as he was being denied access.
The Investigating Officer also told the court that all the payments purportedly made on behalf of Infralink, through ZINARA, were still under investigation.
In particular, they were still investigating whether fraud and theft had been committed by any of the accused persons.
The rationale for bringing the matter to court when investigations were still in progress was said to be the fact that the focus of the complaint at this point was a separate one of criminal abuse of office in that the accused persons had acted negligently without authority.
He confirmed, in cross-examination, that the initial charges that they had filed were for theft and fraud but that they had since changed the charge to abuse of office since they realised, in the course of investigations, that the ZINARA Board had not authorised the payments.
The evidence of three other State witnesses, namely, the real Honest Kugotsi whose particulars had been fraudulently utilised to open the account; that of Bruce Michael Blake, who had given Grayriver (Pvt) Ltd's details to Collins Mupimbo to open an account at CBZ; and that of Tonderai Marange, an accountant at ZINARA who had subsequently received the anonymous call that precipitated the investigations, was admitted in terms of section 314 of the Criminal Procedure and Evidence Act [Chapter 9:07].
THE DEFENCE CASE
The first accused, Simon Taranhike, gave evidence which was crystalline that the reason Infralink fell into arrears in servicing its loan repayments to the Development Bank of Southern Africa (DBSA) was because they were unable to secure foreign currency from the Reserve Bank to repay the loan even though they had money in the local bank, NMB.
Representations to the Ministry of Transport and the Ministry of Finance, to assist in securing the necessary funds, had not borne any fruits. By March 2017, the arrears were ringing at $14m. As at December 2016, $232m had been paid on the loan of $206m but $171m was still owed in total.
It was following this December meeting that he had received instructions from the CEO on targets to be met the following year and on the need for innovative thinking to clear the debt.
He described to the court how the instructions, in essence, required him to raise $1.2 billion through stipulated tasks within a short period of time with consequences.
A resolution had been taken at the December meeting for Infralink representatives, inclusive of Group Five, to go to South Africa to meet with the Development Bank of Southern Africa (DBSA) with a view to negotiating on the loan repayments being made on rand and then being converted into US dollars, since the loan was in US dollars.
Another possibility explored was that of using $17m held in a reserve account to set off the 14m then accumulated in arrears.
A meeting had taken place in South Africa, in March 2017, with the Development Bank of Southern Africa (DBSA). Apart from the witness, the team that went to South Africa included the Chairperson of ZINARA and Infralink, Mr Albert Mugabe, the Deputy Chairperson, Mr Kamwi, the CEO, Ms Masiyiwa, and a member of the Board, Ms Mujokoro.
Whilst the payment plan to use reserve funds had been rejected on the grounds that Infralink were negotiating for restructuring with dirty hands, pleas to pay in rand had been made.
Following the meeting, and a lengthy debate with the Development Bank of Southern Africa (DBSA), a team had been tasked to put these representations, to pay in rand, in writing. This had been done, including the furnishing of the payment plan. Names of those companies that would pay in rand were also provided to DBSA. The Development Bank of Southern Africa (DBSA) had agreed to payment being made in rands.
The payments had then been made in May 2017 through the three companies found by Dr Hokonya.
A total of $2.1m was paid to the Development Bank of Southern Africa (DBSA) between 3 and 23 May 2017.
He also told the court that the value put on rand payments was not to exceed 30% of the expenses paid. He attributed the different rates and amounts paid to these payments having been effected on different dates.
He also confirmed giving the second accused explicit instructions to go to banks to get help in potentially settling the loan from rand based accounts. He was also adamant that ZINARA had only paid out in all cases upon receipt of confirmation that the money had indeed been received in the Development Bank of Southern Africa (DBSA) account and that all payments had gone through.
He denied that what he had done amounted to procuring money from unauthorised sources or that they had procured money on the open market since they had gone to CBZ, ZINARA's bank, which, in turn, had referred them to another Bank for assistance and subsequently to Dr Hokonya.
The second accused's evidence, Shadreck Matengabadza, the Finance Manager with ZINARA, essentially confirmed the chain of events, that, in that capacity he had gone to their relationship manager at CBZ, Mr Henry Njanji, who, in turn, had taken him to meet Patrick Takawira at FBC Bank, who, in turn, had introduced him to Dr Hokonya.
The latter had then put him in touch with Chandler Moyo as his point man.
It was the latter who had advised him that he had found a company in South Africa that could effect payments in rand. It was also Chandler Moyo who had provided the details for Grayriver (Pvt) Ltd and informed him that Solarwatts in South Africa, which had effected payments in rands, had said their money should be received by Grayriver (Pvt) Ltd.
He told the court that the schedule of rand payments that was before the court was not correct and had been tampered with by its compilers with altered figures as to what was paid out in order to fix him.
He opined that it was because of the discovery of the manipulations and flaws such as these that the Board had in fact attempted to have withdrawn the charges the accused persons were facing.
He too denied illegality in the dealings, emphasising that they were authorised to do so and were in fact paying expenses. He told the court that, with the benefit of hindsight, he now realised that the CEO had deliberately never wanted to sign anything from the finance department - always referring back to it anything that required action.
The third accused, Steven Mature, an accountant in ZINARA, who reports to the Finance Manager, described his duties as being to receive payment instructions and then passing these on to clerks to raise payment vouchers, send or effect RTGs.
He told the court that the payments made were fully authorised and relied on the CEO's letter of 9 January 2017 instructing the Finance Director to look at other ways of ensuring that the debt was paid; and the evidence of Infralink's Board minutes on the payment plan to the Development Bank of Southern Africa (DBSA).
The fourth accused, Tendai Kufa, an engineer within ZINARA, was said to have countersigned instructions to the bank to effect payment to the companies in the schedule that was placed before this court.
He explained that sometime from 22-23 May 2017, the first accused had been acting CEO as the CEO was away. He himself was Acting Director-Technical on behalf of the Director who was away. He had been invited to do sign-offs of all payments that had been done that day.
The Grayriver (Pvt) Ltd payment was amongst them and against it was indicated the Development Bank of Southern Africa (DBSA) loan repayment.
He had asked about it as he had never come across the name and was advised that they were being paid in line with developments that had taken place in Infralink regarding payments to Infralink. He was also told that the Finance Department had been advised and was aware. As he was talking to the Acting CEO, he took his word for it that all was above board. There was a supporting voucher from Finance and all protocols had been observed. He had therefore signed.
The fifth accused, Precious Murove, described his duties as the Director for Administration and Human Resources Management within ZINARA.
He is also responsible, among other things, for signing off all ZINARA and Infralink payments as a 'B' signatory. He is however not a Board member and does not attend Infralink meetings. His role is to only sign off as additional signatory.
His evidence was that the first accused was indeed authorised to look for local and individual partners to facilitate payment to the Development Bank of Southern Africa (DBSA). He told the court that the DBSA loan was discussed at three levels, namely, the ZINARA Board, the Finance Committee, and the Executive Committee. He confirmed, from internal correspondence (exhibit D6), that the issue that ZINARA was supplementing NMB funds by making payments in rands was fully known.
He explained, in cross examination, that the loan's importance to ZINARA, in executive meetings, arose from it having ceded revenue from three streams, namely, transit fees, tolling fees, and abnormal load fees for a period of ten years. As such, ZINARA had a direct interest in the repayment of the loan because it could not cede its revenue streams indefinitely since it would be prejudiced by doing so.
That being said, his standpoint was still that Infralink is a private entity and that it was Infralink that was getting the revenue streams from the ceded entities in order to pay the Development Bank of Southern Africa (DBSA). As such, the issue of the DBSA loan was, according to him, essentially an Infralink issue.
THE LAW
Public abuse of office impacts on the public's trust and confidence in public institutions. It can also have financial consequences. As one author, JOHN HATCHARD puts it:
“(T)he offence is essentially a support for integrity and good governance on the basis that those who are entrusted with State power must act for the public good. Whilst many of the reported cases involve police officers, the offence applies generally to officials in the public service, local government, and, arguably, those in the private sector providing public functions."
It has also been explained thus:
“The essence of the crime of misconduct of public office is either wilfully neglecting to carry out the public duty entrusted to you, or wilfully abusing it for some improper end.”
The offence of criminal abuse of duty as a public officer is clearly defined in our Criminal Law (Codification and Reform) Act (Code). The provision is described as re-enacting and expanding upon the previous section 4 of the Prevention of Corruption Act: see G. FELTOE, Commentary on the Criminal Law (Codification and Reform) Act [Chapter 9:23] November 2017.
Historically, neglect of duty, bribery, and extortion were at the core of abuse of public office: Hawkins Pleas of the Crown 1716-121 and 1824 as discussed by GRAHAM McBAIN in his article Modernising the Common Law Offence of Misconduct in a Public or Judicial Office, 7J. Pol. & L. 46 (2014).
Furthermore, crimes such as bribery, extortion, theft, and fraud which may also speak factually to various situations that involve public officers are separate offences in the Criminal Law (Codification and Reform) Act (Code).
Criminal abuse of duty as a public officer is defined as follows:
“174 Criminal abuse of duty as public officer
(1) If a public officer, in the exercise of his or her functions as such, intentionally -
(a) Does anything that is contrary to or inconsistent with his or her duty as a public officer; or
(b) Omits to do anything which it is his or her duty as a public officer to do; for the purpose of showing favour or disfavour to any person, he or she shall be guilty of criminal abuse of duty as a public officer and liable to a fine not exceeding level thirteen or imprisonment for period not exceeding fifteen years or both.
(2) If it is proved, in any prosecution for criminal abuse of duty as a public officer, that a public officer, in breach of his or her duty as such, did or omitted to do anything to the favour or prejudice of any person, it shall be presumed, unless the contrary is proved, that he or she did or omitted to do the thing for the purpose of showing favour or disfavour, as the case may be, to that person.”
To be guilty of abuse of public office, what can be gleaned from the above is that:
(i) One must be a public officer.
(ii) Must have engaged in conduct that is inconsistent with duty as a public officer.
(iii) Must act intentionally in the act of omission or commission.
(iv) The purpose of the conduct must be to show favour or disfavour to any one person.
The definition of public officer, as captured in our Criminal Law (Codification and Reform) Act (Code), is as follows:
“'public officer' means -
(a) A Vice-President, Minister, or Deputy Minister; or
(b) A governor appointed in terms of an Act referred to in section 111A of the Constitution; or
(c) A member of a council, board, committee, or other authority which is a statutory body or local authority or which is responsible for administering the affairs or business of a statutory body or local authority; or
(d) A person holding or acting in a paid office in the service of the State, a statutory body, or a local authority; or
(e) a judicial officer.”
LEGAL AND FACTUAL ANALYSIS
The issues for decision essentially whittle down to two:
(i) Firstly, whether under the described factual circumstances the accused persons were acting as public officers; and
(ii) Secondly, whether they abused public office in their conduct in order show favour to the companies in question.
Whilst the Criminal Law (Codification and Reform) Act (the Criminal Code) is always the starting point in resolving any disputes where an area of law has been codified; however, as has been pointed out by G. FELTOE, Commentary on the Criminal Law (Codification and Reform) Act [Chapter 9:23] November 2017, codification has not obviated the need for judicial interpretation.
Additionally, to avoid judicial lag, and as a matter of persuasive comparative analysis rather than binding authority, we do well in an increasingly shrinking world to also understand how other jurisdictions have approached and interpreted the concept of abuse of public office.
Whether the accused were acting as public officers
The thrust of the argument proffered by the accused persons, as highlighted, is that the debt was an Infralink debt - which is a private company.
That Infralink is a private company set up as a special purpose vehicle by ZINARA and Group Five for purposes of carrying out public functions is not in dispute.
It is equally not in dispute that all five accused persons were employed by ZINARA, a statutory entity, and that only the Finance Director, among the accused, had an overlapping function in Infralink.
The fact that the Government is the major shareholder of an entity has been opined not to colour in any manner whatsoever its nature as a private entity where it is registered. Its employees are said to be not public officers.
As observed in the case of S v Chikumba 2015 (2) ZLR 382 (H)…, with reference to section 169 of the Criminal Law (Codification and Reform) Act [Chapter 9:23] (the Code) as to who is a public officer, the court observed thus:
“The section does not refer to Government-controlled entities. It refers to persons holding office in the service of the State. To say the Chief Executive Officer of Air Zimbabwe Holdings, a private company, is the same thing as 'a paid office in the service of the State' is absurd. The Government is merely a shareholder in the airline. It is not the employer. In my view, the person referred to in that section is a civil servant who is employed directly by the State and paid directly by it.”
And, further, at p391C:
“It is true that the State may sometimes run its affairs indirectly through statutory corporations. But, the definition of 'public officer' caters for that. Section 169 defines a 'statutory body' to mean, among other things, '…, any body corporate established directly by or under an Act for special purposes specified in that Act.”
In this instance, the facts are very distinguishable from the above case in terms of what actually pertained on the ground in terms of the practical day to day link between ZINARA and Infralink.
In exhibit D4, which was placed before this court by the accused persons' counsel, an Infralink document compiled for the Minister of Finance and dated 24 February 2017, Infralink is described as a company under the management of ZINARA.
In actual practice, ZINARA had an almost indistinguishable interest in running the affairs of Infralink whose business was no doubt of a public nature - albeit it was a privately registered entity.
What is significant in this case is that whilst indeed Infralink is a private corporation, its management and administration was entirely in the hands of ZINARA employees because it was simply a special purpose vehicle set up for the management of a joint project between Government and an implementing partner.
There was, strictly speaking, no separate staff running the affairs of Infralink.
The Finance Director, at all times, wore two hats, as Finance Director of ZINARA and as Finance Director of Infralink. The CEO herself was clear about the crucial day to day overlaps within ZINARA and Infralink.
Crucially, Infralink's functions were undeniably of a public nature. It matters not that the fulfilment of the mandate was through a private company.
In the English case of R v Cosford, Falloon and Flynn [2013] 2 Cr App R8, for example, the court concluded that the important point is:
“Whether that duty is a public duty in the sense that it represents the fulfilment of one of the responsibilities of Government such that the public at large have a significant interest in its proper discharge.”
In that case, it was held that nurses in a prison setting, whether trained as prison officers or not, and whether or not the prison is run directly by the State or indirectly through a private company, paid by the State to perform its functions, had duties which fulfilled the requirement of a public office for this purpose: see a discussion of the case by GRAHAM McBAIN, Modernising the Common Law Offence of Misconduct in a Public or Judicial Office, 7 J. Pol. & L. 46 (2014)…,.
In this instance, even if the debt legally belonged to Infralink, which is a private corporation; when the facts, as described herein, are looked at in their entirety, it is hard to see how ZINARA can be said to be out of the picture or to be divorced from any actions taken by the accused in their capacity as public officers on behalf of Infralink.
However, the mere fact of being a public officer does not, on its own, automatically make one liable.
In the Hong Kong case of HKSAR v Wong Lin Kay [2012] 2 HKLRD 898, for example, the Hong Kong Court of Final Appeal, in deciding whether a public officer should be liable under the facts of a particular case, held that:
“The correct approach is not to attempt somehow to decide in the abstract or in isolation whether a person is or is not a public officer. One must examine what, if any, powers have been entrusted to the defendant in his official position for the public benefit, asking how if at all, the misconduct involves an abuse of those powers….,. If the defendant occupies a position which confers no such powers on him, he is not a candidate for prosecution for the offence even if he is employed by a local department or by an analogous public body.”
It was stated in that case, that, whilst in every day speech every employee of public sector may be termed a public officer that does not necessarily mean that all public sector employees are potentially liable for misconduct in public office.
A person may be a public sector employee and yet his job may not vest him with any relevant powers or discretions that are exercisable for the benefit of the public. Furthermore, the misconduct may not involve any abuse or have any relevance to the position he occupies.
In casu, the duties entrusted upon the Finance Director were essentially of a public nature whether within ZINARA or Infralink itself which was carrying out public functions.
He, in turn, delegated certain functions to some of the co-accused, as public officers, who all the while performed duties for ZINARA as the public authority managing Infralink's day to day affairs.
Simply put, the accused persons were public officers carrying out public functions on behalf of Infralink whose functions were themselves of a public nature.
Having thus observed, this court is of the view that the more crucial question therefore on which energy should be expended is whether the accused persons abused their offices as public officers by acting inconsistently to show favour to the companies in question.
Was there Abuse of Office?
What emerges from the definition from the definition in section 174 of the Criminal Law (Codification and Reform) Act [Chapter 9:23] as to what constitutes abuse of office is the use of the word “intentionally” in carrying out the act; an eschewed act of omission or commission.
This means that the conduct constituting abuse must be deliberate, calculated, or purposeful.
Furthermore, the word abuse itself connotes misuse, exploitation, taking advantage, and recklessness in the conduct.
The 1979 English case of R v Dytham 1979 (2) QB 722 gives an indication of what is required in terms of arriving at an informed conclusion that there was abuse of or neglect of public office. As the court stated therein:
“The neglect must be wilful and not merely inadvertent; and it must be culpable in the sense that it is without reasonable excuse or justification.”
As further stated therein, the misconduct impugned must be calculated to injure the public interest so as to call for condemnation and punishment.
Also, in the Australian case of Northern Territory Australia v Mengel (1995) CLR 307, as yet another example, it was held that:
“It is the absence of an honest attempt to perform the functions of the public office that constitutes abuse of office. Misfeasance in public office consists of a purported exercise of some power or authority by a pubic officer otherwise than in an honest attempt to perform functions of his or her office whereby loss is caused to the plaintiff. Malice, knowledge, and reckless indifference are the states of mind that stamp on a purported but invalid exercise of the power the character of abuse or misfeasance in public office. If the impugned conduct then causes injury, the cause of action is complete.”
In the English case of AG Reference No.3 [2005] QB 73, which turned on characterisation of misconduct and the necessary mens rea, it was decided that;
“Whether the misconduct was of a sufficiently serious nature would depend on the responsibilities of the office and the office holder, the importance of the public objects which they served, the nature and extent of the departure from those responsibilities and the seriousness of the consequences which might follow from the misconduct.”
When the factual circumstances in casu are examined, under which outside companies had been sought to make payments on behalf of Infralink in South Africa, there is clearly no evidence that the accused had intentionally misconducted themselves in their duties in order to deliberately prejudice the public.
There is every indication that they had done all that was possible to source the currency from the Reserve Bank of Zimbabwe.
Neither can it be said that the evidence showed that they acted with the sole purpose of showing favour or disfavour to the various companies as the reason behind their actions.
Granted, as the State pointed out, the amounts paid out varied and lacked consistency and did not always constitute no more than 30% of the expenses which was said to have been the agreed threshold for repayment.
However, the second accused challenged the accuracy of the schedule.
In the absence of any direct evidence of corruption having been placed before this court or other ill-motivation, this court concludes that the primary motivation throughout, in making the payments for the currency sourced, was simply to stem arrears that were spiralling out of hand. The hazards of borrowing without repaying were generating an unsustainable debt which was not in the public's interests.
Illegal conduct is of course as a matter of principle and of law not justified.
The State points out, that, in terms of the section 5(1)(a)(i) of the Exchange Control Act [Chapter 22:05] as read with Exchange Control Regulations S.I.109 of 1996, it is a criminal act to make payments outside Zimbabwe without exchange control authority.
It is equally true that respect for the rule of law is vital as amply recognised as such by our courts in various cases: see, for instance, the discussion in Commissioner of Police v Commercial Farmers Union 2000 (1) 503 (H)…,; Mangwiro v Chombo HH710-16.
At the same time, the concept is certainly not a rigid non-contextual concept that automatically lends itself to observance. In reality, the rule of law is:
“A qualified and variable thing depending for its effectiveness on many social, legal, and political forces and agencies being in sync…,. Whatever the case, with necessity, however, the mere existence and use of law are themselves not sufficient for the rule of law.”
See MARTIN KRYGIER, Rule of Law in Rosenfeld M & Sajo A (eds) The Oxford Handbook of Comparative Constitutionalism (Oxford: Oxford University Press 2012 at p234.
Furthermore:
“(T)he rule of law is so complex an achievement, dependent on so many factors in so many domains that it is peculiarly miscast by lawyers' often solipsistic understandings and renditions:”
See MARTIN KRYGIER, Rule of Law in Rosenfeld M & Sajo A (eds) The Oxford Handbook of Comparative Constitutionalism (Oxford: Oxford University Press 2012 at p249.
The point of these observations, in the context of this case, is this:
The conduct of purchasing or sourcing foreign currency in Zimbabwe, outside legal means, more often than not stems out of critical need as opposed to a wanton desire to flout the law.
It is common knowledge that observance of the rule of law, through laws that have sought to prevent, curb, and restrain foreign currency violations, have had less than a sterling record of success in terms of adherence to these laws by the general populace.
The law has largely been impossible to perform as economic and social realities on the ground have necessitated the sourcing of currency from other channels, by businesses in particular, just to stay afloat, largely because the Government itself has failed to provide the currency officially.
This case should therefore not be looked at oblivious of the economic challenges on the ground that face not only companies and other businesses, but all entities and individuals across the spectrum of society in our country in obtaining foreign currency.
In the case of Telecel Zimbabwe (Pvt) Ltd v The State 2006 (1) 467 (H), a criminal appeal before the High Court from the Magistrate's Court, the appellant had been found guilty of 60 counts of purchasing foreign currency from unauthorised dealers at parallel market rates without Exchange Control authority.
A mandatory minimum fine had been imposed by the magistrate of no less than the foreign currency involved.
As in the present case, Telecel had experienced major difficulties in accessing foreign currency from its bankers to pay off its international contractual loan as well as to meet its principal obligations. It had carried out a raft of measures to mitigate the impact of the shortage of foreign currency, endemic in the official market, on its operations but to no avail.
The foreign currency had been purchased outside Zimbabwe.
Albeit, still levying a lesser fine for the offence, the court recognised the special circumstances involved as follows:
“The operating economic environment, the use to which the foreign currency that was purchased was put to, and the motive(s) that drove the appellant to the parallel market cumulatively show the existence of abnormal, unusual, peculiar, and extraordinary circumstances which drove the appellant to break the law. For it, it was clearly a matter of life and death. It was necessary for its survival to purchase foreign currency from unauthorised dealers without Exchange Control authority at parallel market rates. All these constitute 'special reasons'.”
See also Echodelta Limited v Kerr and Downey Safaris 2002 (1) ZLR 632 (H); Meristem Investments (Pvt) Ltd, t/a Micromat v NMB Bank Ltd HH211-02; Stuart Annadale v Material Finance (Pvt) Ltd HH213-02 in which challenges pertaining to the obtainment of foreign currency were focal issues.
Since intention to abuse is key, it is hard to see how, in seeking to make payments that would reduce the debt, the five accused persons, in common purpose, can be said to have intentionally abused their office, moreso when they clearly did everything in their power to obtain sufficient money from the Reserve Bank to keep up with payments without success.
The accused persons are said to have criminally abused office by acting without Board authority, in particular, in making payment through third parties outside the country whom they paid here in Zimbabwe.
The purpose of the visit to South Africa to meet as an Infralink Board, it must be recalled, was to look at the possibility of using reserve funds within NMB, and, alternatively, the option of making payments in rand, which was subsequently approved and followed through.
It is therefore not at all true that the entire Board of ZINARA was oblivious of the arrangement and subsequent payments in rand if consideration is had to the team that went to South Africa and the overlapping and representative roles within ZINARA and Infralink of the persons on that team.
In particular, were the Chairperson of the Board at the time, Mr Albert Mugabe, and the CEO, Ms Masiyiwa.
As such, the Board chairperson himself was aware of the arrangement as it would have been those Board members who had gone to South Africa.
It would therefore be ludicrous in the extreme to hold that officers who later carried out a mandate in good faith, some like accused number five, whose role was merely to sign documents as an alternative signatory in the absence of someone else, should be the ones to face the music.
The then Chairperson and the CEO, who were part and parcel of putting in motion the arrangement, cannot now pretend to look on as seemingly horrified individuals who knew nothing about the subsequent payments.
That is the hallmark of dishonest leadership.
We are in no doubt that they acted with the full knowledge of their CEO whose responsibility it was to bring the issue to the full Board.
From her own evidence- in-chief, the responsibility for the Board agenda was hers.
We were satisfied that the Finance Director did report to the CEO, both in her capacity as CEO of ZINARA and her concomitant position in Infralink, about the payments that were ultimately made which she knew about. She herself, as observed, had attended meetings in South Africa, and, in addition, schedules of which companies would pay on behalf of Infralink had later been sent to the Development Bank of Southern Africa (DBSA).
It was a simple lie that she was not aware of what was happening.
By the time the Finance Committee met to turn down the proposal that outside funds be sourced from the market, she was fully aware that payments had already been made in rands way back in May.
The CEO was far from being an impressive and honest witness.
Her primary motivation, in the manner she gave her evidence, was to ensure that nothing stuck to her as the responsible person; yet, as the CEO, the bucks stops with her.
There is no basis upon which the accused persons should be held to be the ones responsible when what they did was with the full blessings of their ultimate superior under the surrounding circumstances where they were acting in good faith.
Targeting juniors as scapegoats in an alleged fight against corruption lends itself to selective justice and cannot be countenanced.
Moreover, the accused persons are said to have also acted negligently in that their actions resulted in some loss as payments were made to fraudsters.
No evidence was placed by the State before this court to support the assertions that they knew they were dealing with fraudsters or that they benefitted personally from the payments made.
They had not acted negligently as the facts suggest that they had attempted to source third parties, through a traceable channel, who came to court to give his evidence.
Competent verdicts to a charge under section 174 of the Criminal Law (Codification and Reform) Act [Chapter 9:23] are bribery, theft, and extortion.
There was no evidence placed before this court that they acted corruptly or that their conduct amounted to theft which they could have been charged with if that had been the case.
In fact, the Investigation Officer told the court that the police were still investigating.
That, in itself, appeared to the court somewhat clumsy - to bring a case for trial amidst investigations.
From the evidence placed before the court, there is no doubt the primary motivation in making the payments was to reduce the loan in the public interest as agreed to by their immediate superiors. Whilst payments were outside the law, the accused persons, as public officers had not abused their office as per legal definition from the evidence availed in the course of the trial.
In view of the fact that the accused acted with the CEO's authority, whose responsibility it ultimately was to appraise the Board; and, in view of the fact that there was no evidence that the accused persons had deliberately acted to show favour or disfavour to any one person, the court reaches the following verdict:
All five accused persons are found not guilty of abuse of public office in terms of section 174 of the Criminal Law (Codification and Reform) Act [Chapter 9:23] (the Criminal Code) and are acquitted.
