Zupco bus scam: Independent partners TIZ, engages lawyers

ALPHA Media Holdings (AMH)’s Zimbabwe Independent newspaper, in conjunction with Transparency International Zimbabwe (TIZ), has engaged a renowned local legal law firm with a view to compel government to release information relating to the use of public funds and in particular the controversial acquisition of Zimbabwe United Passenger Company (Zupco) buses by Landela Investments (Pvt) Ltd.

e AMH is also publisher of the country’s two other leading private newspapers, namely NewsDay and e Standard, while TIZ is a non-profit, non-partisan, systems oriented local chapter of the international movement against corruption. e move by the two entities to engage the legal practitioners followed several failed attempts to secure information relating to the acquisition of hundreds of Zupco buses by the government in recent months.

e legal firm, Atherstone and Cook, through its partner Chris Mhike, has since written several letters of demands to the full range of public officials, namely Transport minister Biggie Joel Matiza, the Registrar of Companies, Finance minister Mthuli Ncube, Local Government minister July Moyo and to Zupco’s information officer, among other government officials.

In a letter dated July 23, 2020 addressed to a Mrs Chakanyuka at the Registrar of Companies, Mhike urged the official to assist in ensuring that the searched records and information is found.

“In pursuit of the constitutional principles of governmental transparency and accountability, these organisations ( Zimbabwe Independent and TIZ) have recently endeavoured to inspect the records kept at your office relating to various companies, whose activities are in the public interest in various ways, especially in respect of the use of public resources for projects of a national nature,” Mhike wrote.

He added: “After their failure to have access to the records for the concerned companies, our clients instructed our firm to carry out an appropriate due diligence exercise, on their behalf. Unfortunately, on several visits to the company’s registry, Harare office, our own efforts have not yielded positive results as your staff advised either that the file could not be found or that the company’s registry is not conducting any searches at the moment.

“We, therefore, hereby write to formally seek the assistance of the Registrar of Companies, or a suitable registry manager working under you, in locating these files in your records and therefore enable us to complete the very important due diligence exercise as instructed by our clients.”

According to the Independent and TIZ, the list of companies whose record they wish to inspect includes Landela Investments, Landela Mining Venture, FAW Zimbabwe, Great Dyke Investments, Fossil Contracting, CBZ Bank Limited/CBZ Holdings, Freda Rebecca, Rimosa Trading, Fossil Agro, Bill Heights Investments and Massbread Investments.

Apparently, of particular interest, Mhike said is the information relating to the purchase agreement between a government parastatal, Central Mechanical and Engineering Department (CMED) and Landela Investments regarding the purchased Zupco buses.

As a result, Mhike wrote another letter to Matiza dated August 26, 2020 requesting such information, but in his response the minister simply asked the lawyers under which law the information was being requested.

“ ey need full information regarding the recent purchase of buses for the Zimbabwe United Passenger Company (Zupco), but despite their best efforts, Zupco and other individuals and institutions that are involved in the transaction have not been forthcoming with the relevant details,” Mhike said. “ is, therefore, is a formal request for detailed information from your good office in your capacity as the minister responsible for transport, a portfolio that includes the operations of Zupco … this request is anchored on various fundamental constitutional principles and governmental obligations that include good governance, transparency, justice, accountability and responsiveness.”

Mhike further said the secrecy that characterises various recent procurement deals that were recently entered into between “state-controlled/state-owned entities, the Government of Zimbabwe” and private players, including the purchase of buses, are incongruent with the outlined constitutional principles, hence the present quest for access to the requested information.

In response to Mhike’s letter, Matiza simply said: “Kindly note Zupco is not a state enterprise under the Ministry of Transport and Infrastructural Development, but under Local Government and Public Works. Further, your request does not indicate in terms of which law you require the public office to release information so as to assist with the parameters within which information will be released and to ensure the paper trail.”

According to the Independent and TIZ, ministers Matiza, Ncube and Moyo are requested to answer questions such as: exactly how many buses were purchased for use by Zupco in the past 12 months; to what extent was the government involved in those purchases; which person (natural or juristic) made those purchases, and using which resources; what is the exact relationship between Landela Investments and the government and Zupco and what are the financial arrangements relating to the recent purchases of the buses; and to also answer whether the purchases made over the past 24 months were subjected to any tendering process? e other ministers and government departments are yet to respond.

In May, cabinet ministers and senior government officials were evasive after being asked by the Independent to explain the bus deal. e buses were now being sold to Zupco at inflated prices.

Moyo and Matiza distanced themselves from the bus deal and referred questions to the Ministry of Finance and the Procurement Regulatory Authority of Zimbabwe (Praz), which in turn, referred all questions back to the ministers.

Moyo in May said: “Yes, Zupco is under my ministry: but this a CMED issue and that is under the Ministry of Transport.”

But Matiza said: “It is the Ministry of Finance that is responsible for purchases and the tendering. What is there now is there.”

e Finance ministry shifted responsibility to other departments, including Praz.

e government initially signed a hire purchase agreement with Landela, but is now paying the company ZW$863,2 million (which in May was equivalent to US$34,5 million at the official rate then of US$1:ZW$25) for 162 buses. is meant Landela was selling each bus for US$212 962 when it bought each 64-seater bus from Xiamen Golden Dragon Company in China for US$58 900.