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Legal experts call for audit of McDowells books

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Legal experts call for audit of McDowells books



MASVINGO – Legal experts have roundly condemned the lifting of judiciary management at the 103-bed Lees Inn Hotel in Masvingo and called for an immediate investigation of the judiciary manager, Sitshengisiwe Msiza of RJC Executor Services Pvt Limited.

Experts who spoke to The Mirror on condition of anonymity said the process leading to an order by Justice Sunsley Zisengwe to lift judiciary management is opaque and fraught with legal and financial inconsistencies.

Many of the creditors have since died and it is not mentioned in the files how Msiza dealt with the deceased estates.

The lawyers said the most important thing is that the books used by Justice Zisengwe to clear McDowells of its debts are shambolic and the creditors were not involved in the process as is required by the law. They said the situation doesn’t paint a good picture of Msiza as a judiciary manager.

Msiza was evasive and and she then stopped picking calls when The Mirror called her for a comment. The Mirror visited Yousher House No. 80 Hughes Street which is given on papers as her current address but was told that the place was vacated two years back.

The records at the Master of High Court don’t show how much the creditors were owed. A lot of yearly reports could not be found at the Master of High Court. Reports there start from 2018 but the reports for 2022 and 2023 are also missing. The judiciary management case started in 2013.

Msiza’s June 2021 report says she paid creditors ZWL$6, 212, 820.60 and deposited unclaimed ZWL$5,594,868.15 into the General Fund Account at the Master of High Court. She also paid Zimra $1,617,369.20. The report gave a total payment of $13,425,057.40.

Lawyers said this money is nothing compared to the US$ that McDowells raked from clients of his pyramid scheme.

Some 1 107 creditors lost over US$5 million in the pyramid scheme whose proceeds were used to build Lees Inn Hotel and buy properties in Zimbabwe and in South Africa.

Msiza claimed to Justice Zisengwe that MacDowell’s which is owned by  Member Chipamba and his wife Linda paid off the creditors and this saw the High Court giving the two back the hotel.

“The purpose of judiciary management is to ensure creditors get back what they are owed. The McDowells’ case does not have that as its goal,” said a lawyer.

Creditors who received part of their money from McDowells told The Mirror that they just got 30% of what they are owed and this amount was paid at the the rate of US$1 to ZWL$1 using (S.I) 33 of 2019.

Most investors decided not follow up on the money after the judiciary manager took advantage of the SI and paid back at the rate of US$1 to ZWL$1 even after the rate had fallen to 1 : 1 000. The bulk of the said deposits are lying idle at the General Fund Account at the Master of the High Court because creditors are allegedly not making claims. 

Creditors said there was no communication from Msiza and they did not even know where to find her. 

“The judiciary manager must be investigated and an audit of the books done, because all we know is that the books are in shambols and the rate at which the creditors are said to have been paid is not clear,” said one lawyer.

One investor poured in US$870,000 from a family trust and he stands to lose the whole amount. 

Msiza said she had by March 2019 paid 527 creditors a total of ZWL$2,626,324.33 and a balance of ZWL$5.653.239.14 was expected to be cleared in the next 2 to 3 years.

However, in her June 2021 Report, she said the company paid creditors $6, 212,820.60, deposited $5,594,868.15  into the General Fund Account at the Master of the High Court to cater for unclaimed monies and paid Zimra $1,617,369.20. The report gave a total payment of $13,425,057.40.

Many analysts are questioning the authenticity of the reports as they grapple to find the rate used because the SI does not provide for that.  

“We were not consulted and we were only forced to accept 30% of our investments or risk loosing everything. We did not hold any meeting with the company. They were making their own decisions,” said one investor. 

A legal expert who also spke to The Mirror said the matter could be challenged in court if the creditors were not consulted or were coerced to take take part of their investments. 

“This matter can be argued in court and I am sure creditors are preparing lawsuits. Lee’s Inn was built out of the proceeds of McDowell’s illegal activities. So, it can be separated from the claims by the creditors. There are a lot of grey areas that need clarification

The creditors can sue demanding the reports to be audited. What did the company do with deceased’s estates? Do they have an updated creditors database? Creditors can sue from different angles,” he said.    

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