Two prominent Harare businessmen, Satishbhai Patel (60), director of Honda Centre, and Ebrahim Mahomad (57), director of Union Hardware, are facing charges of US$1.4 million fraud stemming from a complex property deal.
The pair were arrested and appeared in court last week, accused of violating section 136 of the Criminal Law (Codification and Reform) Act chapter 9:23.
The alleged victim is Meadow Sweet Investments (Private) Limited, represented by Nyasha Emmanuel Watyoka. The crux of the prosecution’s case centers around a property—stand number 3081 in Salisbury township—measuring 1170 square meters.
Meadow Sweet Investments purchased this partially developed, double-story property in 2002 from John Dimitriou Mallis and Myrsina Myrtoula Dimitriou. Their intention was to renovate the structure into an office complex. However, when all the directors left Zimbabwe in 2004, the renovation plans were put on hold.
The alleged fraud unfolded years later. In 2011, while the property sat idle, Patel and Mahomad allegedly devised a scheme to defraud Meadow Sweet Investments. The prosecution claims they forged a special resolution, falsely representing that Patel was a director of the company and authorized to sell the property on its behalf.
They then allegedly created a power of attorney, empowering fugitive Cuthbert Chengeta to transfer the property. Chengeta, acting as conveyancer, transferred ownership to the Zimbabwe Energy Regulatory Authority (ZERA). This transfer, according to the prosecution, was entirely unauthorized.
The alleged fraud only came to light in 2023 when Dr. Muchazoreka Richardson Nyamugama, a director of Meadow Sweet Investments, returned to Zimbabwe. Upon inspecting the property, he discovered it had been renovated and was in use by ZERA. Further investigation revealed the fraudulent transfer orchestrated by Patel and Mahomad.
A key element of the prosecution’s case rests on the alleged inauthenticity of the capital gains tax certificate submitted to the Registrar of Deeds. The Zimbabwe Revenue Authority (ZIMRA) confirmed that this certificate, crucial for the property transfer, is not in their records. This casts serious doubt on the legitimacy of the entire transaction.
The state contends that Patel was never a director of Meadow Sweet Investments, directly contradicting the forged special resolution used to facilitate the sale. The prosecution argues that Patel and Mahomad had no legal right to sell the property and their actions resulted in a US$1.4 million loss for Meadow Sweet Investments. To date, no funds have been recovered.
The case highlights the complexities of property transactions and the potential for fraud when proper due diligence is not followed. The alleged forgery of documents, the involvement of a fugitive conveyancer, and the discrepancies in tax records all point to a meticulously planned scheme.
The outcome of the trial will not only determine the fate of Patel and Mahomad but also serve as a cautionary tale in the Zimbabwean business landscape.
The prosecution’s case hinges on proving the fraudulent nature of the documents used to transfer the property and demonstrating the lack of authorization from Meadow Sweet Investments.
The authenticity of the capital gains tax certificate is a critical piece of evidence, as its absence suggests a deliberate attempt to circumvent legal processes. The testimony of Dr. Nyamugama, detailing his discovery of the unauthorized transfer and subsequent investigation, will also likely play a significant role in the trial.
