ABWA USD31Million Fraud: High Court Judge Grants Order for Class Action
8 June 2024
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By Court Correspondent | The Commercial Division of the High Court of Zimbabwe, presided over by Judge Justice Sylvia Chirawu-Mugomba, has granted an order allowing a class action lawsuit against Shamiso Fred and her African Business Women’s Association (ABWA). This decision marks a significant legal development, as it is the first class action in Zimbabwe targeting a Ponzi scheme, involving hundreds of victims.

Shamiso Fred, previously an honorary diplomat in Asia and the CEO of ABWA, is accused of orchestrating a Ponzi scheme disguised as a collective investment operation. This scheme purportedly focused on egg production and dairy farming projects. Fred allegedly entered into numerous contracts with various investors, promising lucrative returns on their investments. The agreed periods for these investments ranged from 22 to 48 months, during which investors were to receive a monthly profit share. However, Fred and ABWA defaulted on these payments, leading to substantial financial losses for the investors.

Blaman Sekete, appointed as the lead plaintiff, will represent the other victims in this class action. According to section 7 (l) (a) of the Class Action Act [Chapter 8:17], Sekete is mandated to publicize the class action notice in two Zimbabwean newspapers on three different dates, and once in the Sunday Times, a newspaper with UK circulation, by July 8, 2024. Additionally, announcements must be made in Ndebele, Shona, and English on Zimbabwean radio and television stations.

The legal representation for Sekete and the other victims is being handled by Jacob Mutevedzi of Clairwood Chambers, with Advocate Reginald Mutero also appearing in court. The aim is to recover millions of dollars allegedly lost to the Ponzi scheme, with a significant number of the affected individuals being members of the Zimbabwean diaspora in the United Kingdom. These victims reportedly invested sums ranging from $2,000 upwards, attracted by the promise of high returns.

Part of the court’s judgment includes the authorization for the class action: “It is ordered that:- 1. Leave be and is hereby granted to the applicants in terms of the Class Actions Act [Chapter 8:17) to bring a class action against the first and second respondents. 2. The first applicant be and is hereby appointed to represent the class of persons concerned in the class action.”

This landmark case is expected to set a precedent for how Ponzi schemes are legally addressed in Zimbabwe, providing a pathway for victims to seek redress and holding fraudulent operators accountable.