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 the 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 the 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 illegality. The transaction between the 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 a 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 the 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.