Council boss in centre of massive scandal commits suicide

TWO senior executives at Bikita Rural District Council (RDC) in Masvingo allegedly used a company that they jointly-owned to siphon thousands of dollars from the local authority. However, one of the executives committed suicide as the net was closing in on them, investigations have revealed.

Peter Chibhi, the local authority’s CEO, died in the early hours of Monday at the Masvingo Provincial Hospital after allegedly taking an unknown poison some days after returning from Harare where he had appeared before a government committee that was investigating him.

Chibhi had also met Zanu PF provincial leaders in Masvingo where he was allegedly quizzed about the corruption in Bikita.

The CEO’s death has been confirmed by the Bikita RDC.

Chibhi allegedly set up Bikita Hanyanya Investments (Pvt) Ltd with the council’s finance director Never Mavhuna and the duo used their positions in the local authority to award their venture contracts worth millions of dollars.

An investigation by NewsDay Weekender in partnership with the Information for Development Trust, a non-profit organisation supporting investigative journalism in Zimbabwe and southern Africa, that focused on the operations of the company and its ownership structure was at its tail end when the council boss died.

Insiders said Chibhi took the poison soon after returning from Harare where he appeared before a committee set up by the Local Government and Public Works ministry to investigate alleged widespread corruption at the Bikita RDC.

Documents obtained by this publication and interviews with different people showed that the rot started in early 2021 when the local authority made a resolution to form a company to engage in various business activities to supplement the council’s income.

Such initiatives are allowed under Section 80 of the Rural District Councils Act, which states that “with the written approval of the minister, and subject to such terms and conditions as he may impose, a council may engage in any commercial, industrial, agricultural or other activity for the purpose of raising revenue for the council.”

However, insiders said Chibhi and Mavhuna went on to establish Bikita Hanyanya Investments (Pvt) Ltd without approval from the Local Government ministry before they started influencing the awarding of lucrative contracts to the venture.

Mavhuna refused to comment on the matter before Chibhi’s death and referred questions to his boss.

“I am not at work these days and cannot comment on that matter. The best person to help you is the CEO,” Mavhuna said.

Chibhi spoke to NewsDay Weekender before the tragic events where he denied ownership of the company as he claimed that it was fully-owned by council.

But a copy of Bikita Hanyanya Investments (Pvt) Ltd certificate of incorporation listed Chibhi and Mavhuna as the only directors, each with 50% shares in the company.

The certificate shows that Bikita Hanyanya Investments was incorporated on May 12, 2021.

Council records show that within four months, the company was already doing business with council after it was awarded a contract to enforce traffic by-laws, which included clamping and towing services at Nyika Growth Point.

“The executive officer finance reported that Bikita Hanyanya, a registered private limited company, managed to open a bank account with AFC (Bank),” read part of minutes of a Bikita RDC meeting held in March 2022.

“He went further and highlighted that currently the company was enforcing traffic by-laws in the Growth Point since October 2021.”

The shadowy company was awarded many other contracts, including management of the Nyika Growth Point bus terminus, collection of vendor levies, security services, cleaning services, and management of the local authority’s Pambudzi Lodge, investigations showed.

Chibhi at the time claimed that there was no need to put the contracts to tender before awarding them to Bikita Hanyanya since it was an internal matter.

“There is no need to advertise tenders because this is just council work being carried out by council using internal resources,” he said then.

“In fact, there are other outstanding contracts in agro-forestry and quarry-mining that the company should get as per council plans.”

Bikita RDC chairperson Thomas Mataga said he had never seen the company’s certificate of incorporation, but still insisted that it was owned by the local authority.

“From what I have been told, Bikita Hanyanya is owned by the council but there are issues which were raised about the company and are being investigated,” Mataga said.

It emerged during the investigations by NewsDay Weekender that the Local Government ministry was probing the relationship between Bikita Hanyanya and the RDC in January.

The ministry appointed Morgen Hungwe to lead the committee that is investigating the alleged corrupt relationship between the Bikita RDC and Bikita Hanyanya.

Hungwe’s letter of appointment zeroed in on the local authority’s alleged corrupt relationship with Chibhi and Mavhuna’s company.

“Furthermore, council established Hanyanya Pvt Ltd without the ministerial approval,” read part of the letter dated January 24, 2024 and signed by then acting Local Government and Public Works minister Daniel Garwe.

“The local authority was accused of operating the business entity in a dubious manner.”

Hungwe’s committee was ordered “to look into the income and expenditure of Bikita Hanyanya Investments dating back to 2021 when it started doing business with council.”

Local Government minister Winston Chitando said he will comment after the investigating committee had finished its work.

“The issue of Bikita RDC is being looked into by an investigation team, which was set-up by the ministry,” Chitando said.

“I will only be able to provide more details when the committee has presented its findings.”

Meanwhile, investigations revealed that the ministry held a meeting with members of the Bikita Business Association on January 22, 2024 where the Bikita Hanyanya issue was raised at a public forum for the first time.

The association had written to the ministry to register its opposition to the council’s 2024 budget as it argued that the new tariffs were at variance with what was agreed during consultation processes.

Bikita Business Association chairperson Charles Musimiki said the establishment of Bikita Hanyanya Investments was not transparent and its contracts with council were suspicious.

“Everyone was raising questions about how the company was established, and how it was doing business with council,” Musimiki said.

“We were told it is a company owned by the council, but has been registered in the names of Chibhi and Mavhuna. “How then can this be a council company? Everything is shrouded in mystery.”

The Bikita Business Association was formed by the business community in and around Nyika Growth Point to engage in issues of mutual cooperation as well as to push for the ease of doing business.

Bikita Residents and Ratepayers Association spokesperson Luckson Mukomondera said the setting up of Bikita Hanyanya was against good corporate governance.

“What Chibhi and Mavhuna did defeats rules of good corporate governance,” Mukomondera said.

“The council suggested formation of a company, but before we knew it, a private company was formed and imposed on council without due process.

“No one was consulted and the Local Government ministry was not even aware of the existence of the company.

“There is serious conflict of interest in how this company is getting contracts and working with council.”

Minutes of a council meeting held in May 2022, actually refer to Bikita Hanyanya as a ‘private company’, but do not shed light on the ownership structure. “The executive officer human resources and administration reported that there was need for operationalisation of Bikita Hanyanya Investments,” read part of the minutes.

“The committee was reminded that the company was established in 2021 and started operations with employees enforcing the traffic bylaws in the growth point.

“She went further and highlighted that as planned there was need to transfer employees in the security services, cleaning and income generating projects.

“The committee also agreed that the affected employees should be given time to decide on whether to join the private company and be given full counselling on the implications of the implementation of the resolution.”

The local authority is not new to scandals involving the abuse of funds.

In 2022, Bikita RDC took a loan of US$191 000 to buy Toyota GD6 single cab vehicles for six directors without ministerial approval.

Section 65(1) of the Public Finance Management Act (Chapter 22:19) restricts public entities “from borrowing money or issuing a guarantee, indemnity or security, or to enter into any other transaction that binds or may bind the entity of the Consolidated Revenue Fund to any future commitment, unless such borrowing, guarantee, indemnity, or other transaction is authorised by the enactment which established or governs it, so long however as the applicable provisions relating to this Act are complied with.”

The executives received the vehicles from a loan facility with African Century Limited that was facilitated by Chibhi, binding the local authority to future financial commitments.

At the time, council issued conflicting statements about the arrangement with Chibhi saying the recipients of the cars will pay for them over five years.

On the other hand, the local authority’s then chairman Benjamin Masakadza claimed executives would only pay half of the purchase price and the other half being paid by their employer.

Chibhi and the Bikita RDC’s six directors were subsequently arrested by the Zimbabwe Anti-Corruption Commission on allegations that they had violated the Public Finance Management Act, but the case did go far for unknown reasons.