Chivayo Might Lose Millions If Deal Flops

Chivayo Might Lose Millions If Deal Flops
Published: 2016 June 10 05:54:30 (3202 Views)
LAWYERS representing controversial businessman Wicknell Chivayo have taken steps to try to stop the Zimbabwe Power Company (ZPC) from cancelling multimillion-dollar energy deals awarded to his Intratek firm following pressure from the holding company, Zimbabwe Electricity Supply Authority (Zesa) board.

Chivayo, a convicted fraudster, is a director of Intratek which was awarded tenders worth US$400 million by ZPC. Zimbabwe is embarking on a number of power-generation projects which have attracted controversy after it emerged they were inflated by more than US$500 million raising suspicions that Zesa senior managers and top government officials could have corruptly benefitted through price escalations.

ZPC wants to cancel Chivayo’s deals as its internal legal advisors have warned the power company could have badly damaged its reputation by awarding the multi-million-dollar tenders to a dubious company whose directors are ex-convicts and drug traffickers.

A legal opinion written to the Zesa board by the group’s legal advisor and company secretary Saidi Sangula in April raised serious concerns about the damage the shady tenders could have caused to the integrity of the company.

According to the documents seen by the Zimbabwe Independent, the Zesa legal department raised alarm over Chivayo’s conviction for fraud, validity of his appointment to the Intratrek board and his failure to disclose that he had a criminal record, among many other issues.

Zesa hired lawyers Thabani Mpofu and Wilson Manase to give their opinion on the matter resulting in the attorneys arguing that Chivayo’s conviction is a matter under the courts and therefore cannot be used to cancel his tenders.

Ironically, Mpofu and Manase are also representing Chivayo in a case where he is fighting to have his 2005 conviction on money-laundering quashed by the Supreme Court. Chivayo served the full three year term.

“I am required to provide an opinion on the validity of the agreement concluded between the consultant and an entity known as Intratrek ZW Pvt Ltd and as to whether any basis for its cancellation exists,” wrote Mpofu.

“I have come to the following conclusion: there is no chance on the law and the facts that the contract in issue may be invalid, at least as (the)matter stands.

“The provisions of the law which have been observed upon by the secretary are possibly constitutionally invalid and if challenged may not pass muster.

“The contract cannot be cancelled without any serious consequences being brought to bear upon consultant. If consultant is to cancel it should be prepared to pay both contractual and delictual damages.”

Mpofu also states that: “In issue is one of the shareholders and director a Mr Chivayo. It is common cause that he was convicted of fraud and such conviction has not been upset. He has done time arising out of that conviction.

“The correctness of the conviction is, however, a matter which is presently before the courts. Supreme court record SC 253-05 shows that Chivayo appealed the conviction.”

Documents seen by the Independent reveal that the appeal has not been heard “owing to the fact that there is no proper record.”

“Questions have arisen as to whether Chivayo’s conviction considered, the contract concluded between consultant and Intratrek has any legal validity or should be cancelled.Consultant cannot cancel the contract on the basis of a conviction that may be upset. It is not clear to me why Chivayo has not sought his acquittal by now,” Mpofu writes.

He also notes that “the consultant cannot call Chivayo a convict without being able to prove that assertion in a court of law.”
Mpofu also says that the tender documents say nothing about the issue of disclosure.

“Even if they did say something about the issue of disclosure we still cannot run away from the fact that the conviction is presently on appeal,” Mpofu says.

Last week this paper reported that ZPC bosses are stepping up efforts to cancel Chivayo’s murky multi-million-dollar deals which have caused uproar at the company and in public.

The power-generating firm also wants to cancel the US$5 million advance payment irregularly deposited into Intratek’s account for the US$200 million Gwanda solar project amid indications Energy minister Samuel Undenge is under fire for sleeping on the job, ignoring the irregularities or facilitating the corrupt payment.

Sangula had argued that Chivayo’s tender could be cancelled.

“Section 173 of the Companies Act provides for the disqualification for the appointment as director: Any of the following persons shall be disqualified from being appointed a director of a company — a body corporate, a minor, except with the leave of the court, any person who has at any time been adjudged or otherwise declared insolvent of bankrupt under the law in force in Zimbabwe,” Sangula argued.

“Save with the leave of the court, any person who has at any time been convicted, whether in “Zimbabwe or elsewhere, of theft, fraud, forgery or uttering a forged document or perjury and has been sentenced therefore to serve a term of imprisonment without the option of a fine or to a fine exceeding level five.”

- News Day
Tags: Wickinell, Chivayo, ZESA, ZEDCT, ,

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