Businessman Mutanda embroiled in properties storm

24 May, 2024 - 00:05 0 Views
Businessman Mutanda embroiled in properties storm Colonel (Rtd) Tshinga Dube

eBusiness Weekly

Business Writer

The Zimbabwe People’s Revolutionary Army (ZIPRA), a former military wing of the Zimbabwe African People’s Union (ZAPU), has raised claims against businessman — Fred Mutanda — whom it accuses of fraudulently transferring ownership of some its properties worth millions of US dollars to his business empire, Business Weekly can exclusively reveal.

The properties in question are Princess Park Mansions and Geddes Building in Bulawayo, Zimbabwe’s second capital city.

However, records gleaned by this publication show that Geddes Building belongs to Geddes, a subsidiary of CAPS Holdings. Ownership of Princess Park Mansions, on the other hand, rests with CHS, an investment vehicle controlled by Mutanda.

Tshinga Dube, a senior member of ZIPRA, told Business Weekly in an interview on Thursday that the former military wing had launched an investigation after discovering potential irregularities in the transfer of ownership of the properties to Geddes.

“We are investigating how he acquired the title deeds,” Dube, a former Cabinet Minister said.

An anonymous source, citing the sensitive nature of the situation, said two individuals claiming to represent ZIPRA, E Moyo and one Machingura, visited the estate agent managing the two properties.

While seeking information on the management of the properties, “they strongly implied that ZIPRA owned the properties.”

“They claimed to have seen the tittle deeds showing that the properties belong to ZIPRA.”
Contacted for comment, Moyo told this publication that they were conducting a “search” for properties believed to belong to the former PF ZAPU liberation military wing.

“We are using different methods (of searching) based on information we would have gathered,” he said.

He could not disclose if they had established ownership status to the properties.

Calls seeking a comment from Mutanda were not answered.

Business Weekly investigation, however, uncovered that Mutanda purchased Princess Park Mansions in December 2019 through a shell company CHS, from the beneficiaries of a late former Bulawayo mayor.

Regarding Geddes Building, Geddes acquired it in the 1980s. In 2018, it was used as collateral for a US$1 million loan from the Trade and Development Bank, formerly known as PTA Bank, to benefit St. Anne’s Hospital. Both Geddes and St. Anne’s Hospital are subsidiaries of CAPS.

“ZIPRA has the right to investigate,” said a former close business associate of Mutanda.

“But records indicate these properties do not belong to them. I can personally vouch that Geddes Building was never a ZIPRA asset during my time working with Mutanda. I was also heavily involved in the purchase of Princess Park Mansions in 2019.”

However, ZIPRA established a committee to investigate allegations that Mutanda illegally transferred properties to himself. The committee suspects Mutanda leveraged his close relationship with the former Vice President, Dr Joshua Nkomo and the former leader of PF ZAPU, and his presumed knowledge of ZIPRA’s assets to facilitate these transfers.

Ironically, Mutanda himself spearheaded the campaign to recover ZIPRA properties seized by the Government in 1982. This seizure followed the collapse of the unity government between ZANU and PF ZAPU, after PF ZAPU was accused of insurrection.

The Government used the Unlawful Organizations Act (Chapter 91) on February 16, 1982, to justify the confiscation.

Business tycoon, Kudakwashe Tagwirei and gold dealer, Scott Sakupwanya, have been previously implicated in the alleged grab of Nijo Produce, a Harare property owned by ZIPRA. Nijo was among a dozen of properties Mutanda listed as having belonged to ZIPRA.

Nijo was placed under the Agricultural and Rural Development Authority (ARDA) in 1984 and later transferred to ZANU-PF in June 2020.

The potential property ownership dispute adds another complication for Mutanda, who is already embroiled in a long-running battle with the Government over ownership of CAPS Holdings.

The Government claimed to have purchased a majority stake in the pharmaceutical company from Mutanda years ago.

However, the Supreme Court in February this year stripped Government of its majority control of pharmaceutical giant CAPS Private Ltd following a legal battle initiated by CAPS Pharmaceutical Trust challenging an arbitration award granting the State ownership of the firm.

The ruling follows a three year-long legal battle initiated by CAPS Pharmaceutical Trust, which had challenged the Government’s appointment of the company board.

The conflict began in 2020 when the Ministry of Industry and Commerce, acting on behalf of the Government, appointed five board members to CAPS Private Ltd, a move which sparked outrage from the CPT, which claimed to be holding a 52 percent majority stake in the company.

It argued the appointments were unilateral and violated shareholder agreements, essentially sidelining their role in governance.

On the other hand, the Government claimed that by virtue of the sale of shares agreement between the Government and businessman Mutanda, it had acquired nearly 68 percent majority shareholder of CAPS and was entitled to appoint the directors.

The trustees of the CPT contentiously claimed a 52 percent shareholding in CAPS Private Ltd.
The claim was based on their interpretation of Section 124 of the Health Professions Act, which they believed obliged qualified health professionals to hold a controlling interest in pharmaceutical companies.

However, even if their interpretation was accurate, obtaining a controlling stake through donation required a ratification of CAPS Holdings shareholders at an annual or extraordinary general meeting. In such a scenario, CAPS Holdings shareholders would have needed to donate their 12 percent to give CPT a 52 percent stake CAPS Private Ltd.

The case proceeded to arbitration, presided over by a retired Supreme Court judge.

The initial award, issued in November 2021, favoured the Government, with Justice Ahmed Ebrahim reasoning that CAPS Private Ltd, the drug-making unit of CAPS Holdings, had been purchased by the government through an agreement with the Mutanda Trust.

He further deemed CAPS Private Ltd a public entity with significant Government control.

The CPT, led by its trustees, a group of pharmacists contested the arbitration award granting the Government control of CAPS Private Ltd.

They challenged it in the High Court, but the July 2023 ruling was unfavourable, leading to CAPS Holdings escalating the case to the Supreme Court where the arbitration award was overturned.

The initial agreement, brokered by the RBZ envisioned the Government acquiring 68 percent of CAPS Manufacturing and CAPS Healthcare through a demerger process.

However, the Ministry of Industry and Commerce allegedly misled the arbitration process by presenting a distorted picture, claiming the Government had already purchased CAPS Holdings itself.

This misrepresentation formed the basis for the November 2021 award, granting the Government control of CAPS Holdings. However, the Supreme Court has deemed the award arbitrary and set it aside.

Prior to purported takeover, CAPS Holdings owned 80 percent of ST Annes Hospital, 100 percent stake on Geddes, 60 percent on CAPS Private Ltd and 100 percent on QV Pharmacy.

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