The High Court has nullified the multi-million dollar transaction in which the National Social Security Authority (NSSA) blindly purchased 526 hectares of land in Chegutu from businessman Phillip Chiyangwa using pensioners’ money, saying due process was not followed.
US$3.5 million of pensioners’ money went down the drain
after it emerged that the sale was illegal and the land actually belongs to
Chegutu Municipality.
Recently, the Auditor General’s report raised a red flag
after the purchased land was not part of NSSA’s assets despite millions of
dollars having been paid to Mr Chiyangwa’s Gabroc Investments.
A dispute arose with the local authority arguing that the
sale of land was null and void because laid down procedure of selling council
land was not followed.
The procedure of selling council or public land involves
publication of a notice in at least two issues of a newspaper. The notice
should also be posted at all council offices in terms of Section 152(2) of the
Urban Councils Act. Terms and conditions of the sale, the full description of
the land must be publicised.
The proposal to sell the land must also be open for the
public’s inspection for up to 21 days, to allow objections, if any.
Council argued that the procedure was not followed when
Chiyangwa’s company purchased the land, hence there was no binding sale agreement.
The case spilled into the High Court with Gabroc seeking to
compel council to approve the sale. Justice Charles Hungwe ruled that the said
sale of the land was a nullity hence the court could not sanitise it.
“Clearly for this court to grant the relief sought, would
be to condone an illegality. The transaction between first applicant (Gabroc
Investments) and the respondents (Chegutu Municipality and the town clerk)
contravenes the clear provisions in the Urban Councils Act.
“The rationale behind Section 152 of the Act is to promote
transparency in the administration of public assets. The agreement executed by
the parties in 2001 did not comply with this public policy thrust as set out in
the Act.
“The courts cannot sanitise a transaction that is abjectly
illegal,” said Justice Hungwe. The judge expressed shock at how NSSA blindly
released funds to buy the same land from Gabroc without due diligence.
“It is surprising that second applicant (NSSA) put its
money into a transaction when simple and cost-effective due diligence could
have saved it a fortune.
“Second applicant administers public funds. It is expected
to execute its mandate diligently. It is strange that second applicant found
this transaction attractive,” he said.
The judge nullified the transaction and threw out the application
by Grabroc and NSSA with costs.
The contentious 526-hectare piece of land at Hintonville
Extension was illegally sold to Mr Chiyangwa’s company in 2001 for ZW$10.5
million. Two years later, the company went to sell it to NSSA before concluding
its initial transaction with Chegutu Municipality. Chegutu Municipality
maintained that there was no proof either supporting Gabroc’s purchase of the
land or NSSA’s subsequent right to ownership. Herald
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