By A Correspondent| Two Harare businessmen, Satishbhai Patel (60), director of Honda Centre, and Ebrahim Mahomad (57), director of Union Hardware, have been arrested and charged with fraud involving US$1.4 million.
They appeared in court last week, facing allegations of violating Section 136 of the Criminal Law (Codification and Reform) Act, Chapter 9:23.
The complainant, Meadow Sweet Investments (Private) Limited, represented by Nyasha Emmanuel Watyoka, claims the two conspired to illegally sell a partially developed property situated at stand number 3081, Salisbury Township, Harare, without proper authorization.
According to the State, Meadow Sweet Investments acquired the property, a double-storey structure, in 2002 from John Dimitriou Mallis and Myrsina Myrtoula Dimitriou. The deed of transfer was registered in the company’s name. Meadow Sweet Investments had plans to turn the building into an office complex, but after the company’s directors left Zimbabwe in 2004, the project stalled.
In 2011, with the property remaining idle, Patel and Mahomad allegedly hatched a plan to defraud the company. The duo is accused of creating a fake special resolution, falsely stating that Patel was a director of Meadow Sweet Investments, thereby giving him the authority to sell the property.
It is further alleged that they forged a power of attorney, authorizing a fugitive, Cuthbert Chengeta, to transfer the property to the Zimbabwe Energy Regulatory Authority (ZERA). The property was eventually sold to ZERA based on these fraudulent documents.
In 2023, Dr. Muchazoreka Richardson Nyamugama, one of the directors of Meadow Sweet Investments, returned to Zimbabwe intending to proceed with the development of the property. To his dismay, he discovered that the property had been renovated and was already occupied by ZERA. Investigations revealed that the property had been transferred to ZERA using the power of attorney signed by Patel.
The State maintains that Meadow Sweet Investments never authorized the sale, and that Patel was never a director of the company. Additionally, the Zimbabwe Revenue Authority (ZIMRA) confirmed that the capital gains tax certificate used during the transfer process was fraudulent and not recorded in their system.
Prosecutors argue that Patel and Mahomad had no legal right to sell the property, leading to a US$1.4 million loss for the complainant. To date, there has been no recovery of the funds.
This case raises concerns about corporate governance and the need for tighter controls in property transactions in Zimbabwe. The court proceedings are ongoing, and the defendants’ response to the charges is awaited.