Hippo Valley, former finance director Chibwe fight spills into court

Business Writer

The war between Hippo Valley Estates and formers finance director, John Chibwe, has turned nasty with the latter filing a High Court application seeking to nullify and set aside a forensic audit report that linked him to financial improper conduct.

Tongaat Hulett, (3^rd respondent), the major shareholder for Hippo Valley estates, published findings of an audit report by PriceWaterhouseCoopers (PwC) (4^th respondent) into its operations and those of its subsidiaries that alleged wrongful conduct by Chibwe during his tenure as finance director.

Other respondents in the matter are the Zimbabwe Sugar Sales (1^st respondent) Hippo Valley Estates (2^nd respondent) and Price WaterCoopers South Africa (5^th respondent).

Chibwe argued in his court application that the report ought to be declared a nullity and the unlawfulness of such a sham process and outcome must be dismissed.

“I therefore pray that the court declares the audit report null and void, and set it aside in those respects that pertain to me,” he said.

Chibwe said the fact that the audit was done at the instance of the Tongaat Hulett, itself the major character on the board of director, the alleged transactions having been found to be correct by the auditors and accepted by the shareholders of Hippo Valley Estates, leaves a messy staining which must be cleared.

“Auditors went out of bounds and beyond what Tongaat could do as a member/ shareholder. As a matter of due process, the audit in respect of the 1^st and 2^nd respondents should have been sanctioned by their respective Board of Directors in terms of their articles and memorandum of association,” argued Chibwe.

He added that he aver that the audit process and its subsequent findings must be nullified as a matter of law because it was undertaken by 4^th and 5^th respondents in violation of the Public Accounts and Auditors Act (Charpetr 27:12) which provides for prior registration in Zimbabwe of any auditors, forensic auditors included, by the relevant regulator.

“I aver that the auditors who undertook the audit process whose resultant report I am taking issue with herein were not registered here in Zimbabwe and could not, as a matter of law, come up with a valid outcome.

“The audit report was also sanctioned and commissioned by the 3^rd respondent in direct violation of the then operative Section 196 of the Companies Act (Cap 24:04) as read with Section 198 of the same act. The court is therefore prayed to annul the audit report as it was done in disregard of extant legal instruments,” read part of the application.

Chibwe said he further wish to state as a matter of fact that 1^st and 2^nd respondents never commissioned a forensic audit investigation into their affairs, therefore, in so imposing an audit, the 3^rd respondent violated the 1^st and 2^nd respondent’s articles of association and extant provisions of the then Companies Act, which provided for companies to come up with rules on how such a process should be conducted.

Chibwe also stated that the forensic investigation is a nullity as the manner in which the audit process was done violated his rights.

“I was never informed that I was under an audit process by the representative of the 4^th and 5^th respondent who questioned me regarding the bulk sugar sale at 1^st responded and an alleged buy back letter from BancABC.

“It remains anomalous for the auditor not to ask me to explain certain practices within an organisation, in particular 1^st and 2^nd respondents, only to turn up attacking me on the same issues in the final report.

“Indeed, shocking as it is, I never commented nor clarified on all the issues ascribed to me as wrong doing, save for the brief comments I made to Trevor White at 2^nd responded, not knowing that it was a forensic audit investigation.

“In its substance, the forensic audit report is grossly inaccurate and can easily pass off as a hatchet job meant to soil my name, career and reputation,” he said.

Chibwe highlighted that the 4^th respondent concluded that the bulk sugar sale conducted by 1^st respondent was linked to the bonuses I earned as a Finance Director of the 2^nd respondent when the same is not correct.