Chivayo cleared again; ‘Gwanda Solar Project contract remains valid’

Flamboyant businessman Wicknell Chivayo walked away a happy man after Harare Magistrate Lazini Ncube cleared him in five cases he was was being accused of defrauding the Zimbabwe Power Company (ZPC) of US$5,6 million via the Gwanda Solar Project.

Chivayo was facing a multitude of charges including fraud, money laundering, violation of exchange control regulations and confiscation of profits.

Although he was cleared almost two years ago, the then Prosecutor General Kumbirai Hodzi appealed the decision and got the matter back on trial.

Chivayo’s lawyers led by Advocate Slyvester Hashiti argued that the state was dragging its feet in prosecuting him and the magistrate agreed.

The total value of the contract awarded to Chivayo’s company Intratrek Zimbabwe is US$172 848 597.60 and they argue that USD$ 5 811 224.00 paid by ZPC was partly used to carry out pre-commencement works as agreed under Schedule 11 of the EPC Contract.

Magistrate Ncube said it invites “confusion and uncertainty on how the state formulated these charges preferred against the accused persons if the known complainant has denied ever instituting the same.”

Helping Chivayo’s case was that President Emmerson Mnangagwa’s government via its Cabinet had ordered that the contract between Intratrek Zimbabwe and Zimbabwe Power Company is valid and should be fulfilled.

“There can neither be reasonable suspicion nor probable cause on which accused persons can therefore be brought to court,” Ncube ruled.

“There was no misrepresentation, prejudice nor fraud establishing any criminal charge against them.

“The criminal charges preferred against the accused persons are exculpable as they do not disclose any criminal act or that warrants the adjudication of our criminal justice system.”

“In this case such intention must be alleged to have existed on each of the dates on which invoices were presented to ZPC for payment.

“The non-existence of such intention immediately becomes apparent if one considers that the relationship between the parties was regulated by an Engineering Procurement and Construction Contract (EPC) which authorised payment before works had been done.

“Consequently the allegations are neither founded upon nor do they meet the essential requirements of the crime of fraud as defined in the Criminal Law (Codification and Reform) Act [Chapter 9:23].

“The conduct complained against both accused persons as constituting fraud is frivolous and cannot be supported by the factual circumstances under which the amount of USD$ 5 811 224.00 was utilised.

“There is uncontroverted evidence which proves that the entire amount paid by ZPC was utilised in accordance with the requirements of the EPC Contract.

“The comprehensive report on the evaluation of the pre-commencement works which was jointly carried out and ratified by ZPC and accused persons on 13 July 2020 is clear.

“The importance of this evaluation report confirms that accused persons not only discharged their contractual mandate in full with respect to the pre-commencement works, but went further to utilise their own resources to complete some of the required works.

“The Report vindicates them from all the unfounded allegations that it short-changed or in the least, defrauded ZPC.”

“Accordingly I hereby find both accused persons not guilty and acquitted on all five counts,” Ncube ruled.

In September last year Chivayo and his company sued ZPC for US$22 million for defamation and breaching the Gwanda Solar Project contract.

Chivayo told the High Court that his arrest on allegations of defrauding the ZPC had tarnished his name resulting in him losing business contracts at home and abroad.

In his Judgement Justice Msithu said ZPC was wrong for frustrating its contractor who won the project in an open tender.

“Resultantly it is ordered that: The procurement contract for the Engineering, Procurement and Construction (EPC Contract) of the 100MW Gwanda Solar Project (ZPC 304/2015) between the plaintiff and the defendant as amended is valid and binding between them.

“Consequent to the declaration of the validity of the EPC Contract, an order for specific performance of the said contract is hereby granted.

“The defendant’s (ZPC) claim in reconvention is hereby dismissed with costs. The defendant shall pay the plaintiff’s costs of suit in the claim in convention.”

The judge showered praises on Chivayo who was the sole witness during the trial.

He said he was consistent and trustworthy.

“Plaintiff’s demeanour was impressive. His evidence is clear and straight to the point. He was subjected to lengthy cross-examination and remained firm on his assertion of the facts which were solidly backed by mostly common-cause documentary evidence.”

He said it was impressive that where he had no exact recollection he stated so.

“He readily conceded some matters which were put to him. His body language and composure were consistent with one who told the truth.

“This compared to the demeanour and body language of the ZPC witness Mr Cleopas Fambi can only result in a position where the court must believe him on matters in issue and disbelieve the evidence of the ZPC which in any event was no evidence at all.”

Alternatively, Intratrek had argued that it should be granted an award of damages in the sum of US$25 000 000 as it had incurred expenses whilst trying to secure funding for the project.

The judge ruled, “The plaintiff maintained that it was required under the contract to secure funding for the entire project through a debt financing arrangement.

“The plaintiff was expected to engage in a robust and expensive process of engaging international banks and project financial institutions. It incurred expenses in the sum of US$3 000 000 from 2013 to 2018.

“Further, the contract itself was of significant value and if it was to be implemented, the plaintiff expected to realise a return on investment of US$22 000 000. As a result of the breach the plaintiff had therefore suffered a loss of profit.”