Critical Analysis of Ethics and Corporate Governance Issues on the Rule of Law and Property Rights in Zimbabwe: Gwaradzimba’s SMM Management and Mutumwa Mawere’s Mount Pleasant House Case Study

Brian Kazungu, 06/04/2021

Recently, iniAfrica News wrote an article titled SMM’s Administrator, Afaras Gwaradzimba Struggles to Provide Answers on Mawere’s Mount Pleasant House after 17 Years of Being in Charge.

In this article, it was highlightedthatAfaras Gwaradzimba, as the State appointed Administrator for Zimbabwe’s Shabani Mashava Mines which was placed under Reconstruction in 2004 was finding it difficult to explain what was happening in relation to Mutumwa Mawere’s house.

The issue which needed clarity were on why and how SMM collected rentals for a property that did not belong to it and what did it do with the money which it collected without the consent of the legal owner of the property.

In the WhatsApp chats between Mutumwa Mawere and Afaras Gwaradzimba which this paper saw, the Administrator acknowledged the mishap, promised to look into it and referred further correspondence to the company’s lawyers, Dube, Manikai and Hwacha (DMH) Attorneys.

However, in a related article published by Zimlive under the title, Mawere shops SMM administrator to ZACC over ‘illegal’ leasing of his house, Gwaradzimba is quoted as having said the following:

“I spoke to Mawere and told him I don’t know anything concerning his Mt Pleasant property, and that I would consult SMM management over the matter. I’m the administrator of SMM and not Mawere’s private property. Mawere should know more about his own property than I do,” – Gwaradzimba.

In regard to this whole debacle, here-under is a critical analysis of ethics and corporate governance issues on the rule of law and property rights in Zimbabwe using Gwaradzimba’s SMM Management and Mutumwa Mawere’s Mount Pleasant House as a Case Study.

This conversational critical analysis is adapted from a no-holds-barred WhatsApp chat between Mutumwa Mawere himself and Pharaoh Chimunoko who shared his general and business insights based on the available facts on the ground.

Pharaoh Chimunoko [12:58 PM, 4/4/2021]: Hello Sir. I been going through the threads and I appear to want to ask questions akin to what Mduduzi asked though in a different manner.         

It’s common knowledge that Gwaradzimba was extra-judicially appointed to administer the affairs of SMM and not the affairs of Mutumwa Mawere. My question is how did he get access to the personal house of Mutumwa Mawere?

Could the house, by any chance, have appeared in the books of SMM? Has it been occupied by any SMM employees during your tenure?

Pharaoh Chimunoko [1:17 PM, 4/4/2021]: I just learnt that the house was bought while you were in the USA which implies that it was not bought by proceeds from SMM and probably way back before the acquisition of SMM.

In that case the powers of the administrator to think about following the money does not hold. I don’t know how far true it is that the rentals were being channeled to the company and a trust was to be created where the rentals less admin fees would be deposited.

I don’t get it when one bulges into my safe take all the money go on to bank it deducting administration fees when I never contracted them to do such kind of work. The thought is missing me.

There appear to be less thought Vis a Vis the issue of property rights and corporate limitations.

The idea of forming a company is meant to separate the owners’ and the company’s affairs. When an administrator, who claims professionalism is championing poor corporate governance which he was employed to implement then we can say we are going nowhere.

mdmawere1 [1:18 PM, 4/4/2021]: It was always managed by myself but given that I was living outside the country, I requested Ms. Mwamuka, to assist me in collecting rentals outside the sphere of her employment.

At the time, the control and direction of SMM was under my control. The effect of the reconstruction act was to divest and deprive me of any legal nexus with SMM, the company.

Pharaoh Chimunoko [3:23 PM, 4/4/2021]: SMM has been providing security and paying rates for a house, in return collecting rentals but the administrator who is employed to oversee that there are no leakages of income to unauthorized individuals doesn’t know. I am not amused.

The nature of a reconstruction administration entails accounting for all assets and minimize liabilities. If you can assume unknown liabilities and unknown income and manage unrelated assets my mind rushes to think of incompetence.

Though without facts, the possibility of the company income going unchecked is very high and my question is; how is he faring as an administrator? Is he the right person for the job?

Since his installation, just like a Traditional Chief, how many creditors has he settled. Has the State recovered its debt? Is the company in a better position than before him? Have his fees ever been made public or he is just employed to kill off the company?

In the substance, the house issue might just be a tip of the iceberg. There’s likely to be too much mismanagement and fraudulent misrepresentation of facts at the company. Something needs to be done.

mdmawere1 [3:24 PM, 4/4/2021]: Do you agree that absent consent by the right holders, what can only follow is theft?

[3:39 PM, 4/4/2021] Pharaoh Chimunoko: Admitted. But depends on how the theft is perpetrated. It might not be an outright theft if there was a reasonable belief the house might be part of the property of the company. In that case the criminal element of the intent to deprive the owner of his house might be lacking. However the act constitute a delictual deprivation of right to property

[3:39 PM, 4/4/2021] mdmawere1: In relation to residential property, who is liable for rates and taxes?

[3:41 PM, 4/4/2021] Pharaoh Chimunoko: Obviously the owner or any person assigned by same

[3:42 PM, 4/4/2021] mdmawere1: Do you agree that for one to pay rates in relation to a residential property, one would have to do so as an agent of a known property owner?

[3:44 PM, 4/4/2021] Pharaoh Chimunoko: Unless the lease agreement stipulates otherwise, the tenant is responsible for paying rent. Where there’s any repairs to be done, he may do them but claim the cost from the landlord.

[3:47 PM, 4/4/2021] Pharaoh Chimunoko: In this case you mentioned that you assigned Ms. Mwamuka to manage the house. What needs to be verified is how she was bundled out of control of the house.

[3:48 PM, 4/4/2021] mdmawere1: Is it plausible that rates could be paid without the payer knowing of the property owner in question?

[3:55 PM, 4/4/2021] Pharaoh Chimunoko: The question of competence and suitability for the purpose comes into play. Spending 17 years managing something you don’t know. Even a mistake belief could have been verified and rectified.

mdmawere1 [3:56 PM, 4/4/2021]: I am asking whether it is possible for anyone to pay rates on a property without knowing the property owner?

Pharaoh Chimunoko [4:00 PM, 4/4/2021]: Absolutely Not

mdmawere1 [4:01 PM, 4/4/2021]: So what is your take on the veracity of the statement below by Gwaradzimba?

*****Afternoon once more. I have established that the house has always been leased out. SMM are paying the rates and receiving the rentals. However, SMM does not have the title deeds, neither do they know as to who the house is regis…*****

Pharaoh Chimunoko [4:09 PM, 4/4/2021]: I noticed it when I was reading the threads and two issues came to my mind. Either it is deliberate lie or there’s a literal rent-seeking behavior i.e. looking for avenues of getting income regardless of where it is coming from

mdmawere1 [4:09 PM, 4/4/2021]: What is Gwaradzimba saying above?

Pharaoh Chimunoko [4:13 PM, 4/4/2021]: The statement is portraying his ignorance of what is transpiring

mdmawere1 [4:20 PM, 4/4/2021]: Is he is not stating as true and fact that he established that SMM was paying rates in respect of the house?

Pharaoh Chimunoko [5:34 PM, 4/4/2021]: It’s true but his purported lack of knowledge leaves a lot to be desired.

mdmawere1 [5:37 PM, 4/4/2021]: He says he has knowledge that rent was paid. This precludes no knowledge of the owner. Do you agree?

Pharaoh Chimunoko [5:48 PM, 4/4/2021]: That’s agreeable.

mdmawere1 [5:50 PM, 4/4/2021]: If you agree, do you notice the immediate conflict in the version that admits to payment of rates and lack of knowledge regarding the owner. Do you agree that the two versions are mutually exclusive?

Pharaoh Chimunoko [6:57 PM, 4/4/2021]: The versions are conflicting. It’s like he is saying somebody had been in relaxed mood thinking that things are moving as expected then suddenly confronted with undeniable facts. The confidence dashes away and confusion reigns in

mdmawere1 [7:10 PM, 4/4/2021]: Which version should be accepted?

Pharaoh Chimunoko [7:16 PM, 4/4/2021]: It’s clear he is pretending not to know to save face while at the same time exposing himself as an incompetent administrator

mdmawere1 [7:17 PM, 4/4/2021]: Can a thief be called incompetent?

Pharaoh Chimunoko [7:19 PM, 4/4/2021]: For the purpose of his job as an administrator, Yes, But for his self-aggrandizement No

mdmawere1 [7:40 PM, 4/4/2021]: Do you agree that the rule of law permits no self-help?

Pharaoh Chimunoko [7:43 PM, 4/4/2021]: Yes I do

 mdmawere1 [4/5, 8:39 AM]: Based on this, what can you say as a conclusion? Do you trust Gwaradzimba as an honest actor? Would you hire him to any position involving public trust?

Pharaoh Chimunoko [4/5, 8:55 AM]: In respect of this he is exhibiting signs of a dishonest person. At one point he portrays himself as a professional practitioner and then he pretend to deny knowledge of what he has been doing for 17 years. He offers to verify (a good move for a professional though) what he clearly knows. His demeanor in the whole cast is dishonorable to say the least.