Criminal
Trial
TSANGA
J:
The
five accused persons were charged with criminal abuse of duty as
public officers as defined in s174 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 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through its lawyers, had since withdrawn charges.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 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 commence 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 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 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 was 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 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 the
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 they were issues to be discussed these were
discussed by way of round robin.
Regarding
the loan to 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 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 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 and had provided an account for it held at CBZ.
Solarwatts
was supposed to pay an equivalent of US$250,000 to DBSA on behalf of
Infralink. This they had purportedly done in South Africa and ZINARA,
in return, paid $300,000.00 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 $25,000.00 as introduction fees. He told the
court that he had paid his assistant Chandler Moyo whom he worked
with a sum of US$12,500.00 but had been unable to get his US$12,500
as the account had been subsequently been 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 $12,500.00 the
second accused had taken a loan of $2,500.00 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
$300,000.00. Investigations had also established that the withdrawals
had been fast and furious.
Besides
the $12,500.00 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
$14,000.00 and another $60,000.00 had been used to purchase goods
using his name. Another fictitious person named Mckenzie had also
withdrawn from the account. A fourth transaction involving $40,000.00
had also been made impersonating one of the directors of Grayriver,
Magaisa Sobuza, who had in fact died in 2014.
He
told the court that a total of $131,000.00 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 does exist the IO 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
IO 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'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 s314 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 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 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 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 DBSA.
Apart from the witness, the team that went to South Africa included
the Chairperson of the 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 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. 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 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 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 and informed him that
Solarwatts in South Africa which had effected payments in rands had
said their money should be received by Grayriver.
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 DBSA.
The
fourth accused Tendai
Kufa an engineer within ZINARA was said to have counter signed
instructions to the bank to effect payment to the companies in the
schedule that was placed before his court.
He
explained that sometime from the 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 signoffs of all payments that had been done that
day.
The
Grayriver payment was amongst them and against it was indicated 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 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 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 code. The provision is described as re-enacting and
expanding upon the previous s4 of the Prevention of Corruption Act.
Historically
neglect of duty, bribery and extortion were at the core of abuse of
public office.
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 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 public
officer.
(iii)
Must act intentionally in the act of omission or commission.
(iv)
The purpose of the conduct must be to show favour to disfavour to any
one person.
The
definition of public officer as captured in our 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 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 Feltoe in his commentary on the Code, 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 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) at p 391B,
with
reference to s169 of 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 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
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
R
8
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.
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 s174 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 s5(1)(a)(i) of the Exchange
Control Act [Chapter
22:05]
as read with Exchange Control Regulations SI 109/96, 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) at p525-526;
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.”
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”.
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 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
HH213/2002 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
more so 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
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 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 s174 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 officer
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 s174 of the Criminal Code and are acquitted.
National
Prosecuting Authority,
State's Legal Practitioners
Maphosa
& Ndomene Legal Practitioners,
Accused
Persons' Legal Practitioners
1.
See
G. Feltoe Commentary
on the Criminal Law (Codification and Reform) Act [Chapter
9:23]
November 2017
2.
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, 7 J. Pol. & L. 46
(2014)
3.
Geoff Feltoe above
4.
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) at page 69
5.
Martin Krygier Rule of Law
in
Rosenfeld M & Sajo A (eds) The Oxford Handbook of Comparative
Constitutionalism (Oxford: Oxford University Press 2012) at p 234
6.
Above at p249
