COURT UPHOLDS ADMISSIBILITY OF AUDIT REPORT IN ZWL$137 MILLION GALWEX INVESTMENTS FRAUD CASE
Harare – In a significant development in the ongoing criminal trial involving Clark Clever Makoni and Beverly Aisha Ndonda Makoni, who stand accused of defrauding Galwex Investments (Pvt) Ltd of ZWL$137 million, the court has ruled in favour of admitting a key audit report as evidence.
The accused, who were contracted by Galwex Investments, a company linked to former Reserve Bank of Zimbabwe Governor Dr Gideon Gono, are facing serious allegations of fraud, forgery, and theft stemming from their management of Valley Lodge in Mutare.
Presiding over the case, Magistrate Stanford Mambanje dismissed the defence’s objection to the admissibility of an internal audit report compiled by Galwex’s internal auditors. Magistrate Mambanje held that the document was procedurally prepared and fell within the bounds of relevant and admissible evidence.
“There is nothing irregular about tendering the report,” Magistrate Mambanje ruled. “It was compiled as part of routine internal company processes. Any questions about its authenticity will be addressed during cross-examination.”
Following the court’s ruling, State Prosecutor Heather Muwokoto proceeded to formally submit the report as an exhibit, marking a pivotal moment in the case against the Makonis.
The Allegations
The State alleges that the Makonis unlawfully altered the directorship of Valley Lodge, fraudulently registering the property under their own names and unlawfully withdrawing large sums from Galwex’s corporate accounts.
Prosecutors further allege that the accused manipulated CR14 forms—company documents used to reflect changes in company directorship—and submitted them to banks and other institutions to gain access to Valley Lodge’s financial resources.
In previous hearings, Ms. Muwokoto called the complainant’s internal auditor, Ms. Lindiwe Sabeka, who provided expert testimony on the irregularities uncovered by Galwex’s internal audit. Ms. Sabeka, a qualified forensic accountant, told the court that the accused had been engaged by Galwex solely as estate agents and managers for Valley Lodge.
“The accused were never authorised to alter ownership records or access company accounts,” Ms. Sabeka said, confirming that the audit revealed numerous financial discrepancies that implicated the Makonis.
Defence Challenge Overruled
Defence counsel Mr. Admire Rubaya had argued that the audit report lacked the formal certification of an independent public auditor and was therefore inadmissible. However, the court found that the report, being an internal document used in the ordinary course of business, satisfied the requirements of admissibility at this stage of proceedings.
Corroborating Witnesses
The State’s case has been further bolstered by independent witnesses, including Mr. Tonderai Karumbidza, a manager from ZB Bank. Mr. Karumbidza testified that the accused submitted forged CR14 forms, misrepresenting themselves as the new owners of Valley Lodge, and subsequently engaged in unauthorised withdrawals from the company’s accounts.
Additionally, Mrs. Lindsay Musukutwa, representing the Registrar of Companies, confirmed that official records at the Companies Office still list the Omar Family as the legitimate directors of Valley Lodge.
The court also heard evidence from Mr. Ayoob Omar, a key witness and former proprietor of Valley Lodge, who sold the property to Galwex Investments in 2009. Mr. Omar confirmed that his family remains the rightful directors of Valley Lodge and has never sanctioned any changes to the company’s ownership structure.
“We did not authorise any alterations to the directorship records. There are still unresolved matters between us and Galwex Investments,” Mr. Omar told the court.
Trial Adjournment
With the audit report now part of the official court record, the trial has been adjourned to March 28 for the continuation of proceedings, including the cross-examination of witnesses and the presentation of further evidence by both parties.
Legal Implications
The case highlights the increasing scrutiny over fraudulent manipulation of corporate records and the critical role of internal controls and forensic audits in exposing white-collar crime.
If convicted, the Makonis could face significant custodial sentences, given the scale of the alleged fraud and the breach of fiduciary duties linked to their management of Valley Lodge.
The matter continues before the Harare Magistrates’ Court.