1 HH 54-20 HC 2679/19 HC 2872/19 HC 2955/19 HC 2873/19 A. BLUE TRACK INVESTMENTS (PVT) LTD versus NEDBANK ZIMBABWE LIMITED B. STENHOP INVESTMENTS (PVT) LTD versus NEDBANK ZIMBABWE LIMITED C. ACEFOAM (PVT) LTD versus NEDBANK ZIMBABWE LIMITED D. SAMZIM (PVT) LTD versus NEDBANK ZIMBABWE LIMITED HIGH COURT OF ZIMBABWE CHIKOWERO J HARARE, 18 November 2019 and 22 January 2020 Opposed Application GRJ Sithole, with Z. Kamusasa and H Bonyo, for the applicants T Mpofu, for the respondent CHIKOWERO J: These matters were consolidated to facilitate set down before a single judge. I reserved judgment after hearing argument on the consolidated matter. The applicants are subsidiary companies. The parent company is BST Holdings (Pvt) Limited. At all times material to this matter each applicant maintained two bank accounts with the respondent; an RTGS and a United States dollar (“FCA”) account. Due to the critical shortages of foreign currency, respondent put in place some procedures to be followed by clients who wanted to access such currency. 2 HH 54-20 HC 2679/19 HC 2872/19 HC 2955/19 HC 2873/19 Without following such procedures and with their foreign currency accounts being either unfunded or underfunded, the first three applicants accessed foreign currency to meet their offshore obligations and paid for such currency using their RTGS credit balances. This access to foreign currency was facilitated by respondent’s employees. When served with letters of suspension, the concerned employees promptly tendered identical letters of resignation. To correct the anomalies, the respondent credited the first three applicants’ RTGS accounts and debited their FCA accounts. The result was that the first three applicants’ RTGS accounts stood in credit whilst their FCA accounts became overdrawn. Since it treated all four applicants as a single economic entity, respondent’s corrective action was extended to fourth applicant. There had been inter-account transfer of funds between all applicants. All four applicants share the same directorship and shareholding. In addition, Taesung C & I Co, a Korean company, shares the same shareholding and directorship as the applicants. This Korean registered company was one of the beneficiaries of the huge foreign currency payments made by the applicants. Relating to the inter-account transfers between the applicants, Stenhop transferred huge sums to Samzim. The respondent’s employees complicit in the fraud were Kundai Dube and Albert Chapatorongo. I have already said their suspension and resignation letters were identical. One of the suspension letters reads as follows: “5 March 2019 MN/eco319 Albert Chapatarongo Treasury Harare Dear Albert RE:SUSPENSION FROM DUTY IN TERMS OF SECTION 6 (1) OF THE LABOUR NATIONAL EMPLOYMENT CODE OF CONDUCT REGULATIONS, 2006. 3 HH 54-20 HC 2679/19 HC 2872/19 HC 2955/19 HC 2873/19 In terms of the above legislation you are hereby suspended without pay and benefits with immediate effect. This suspension is pending the holding of a disciplinary hearing. Your employer has good cause to believe that you have committed the misconduct of “any act of misconduct or omission inconsistent with the fulfilment of the expressed or implied conditions of his or her contract” as provided for in section 4 (a) of Statutory Instrument 15 of 2006, the National Code of Conduct. It is believed that during the period extending from 1 March 2018 to 31 January 2019, without authority, outside the bank’s procedures and through misrepresentation, you sanctioned, approved, and gave instructions to International Banking staff and branches to execute various outward foreign payments on behalf of certain clients, whose accounts were either not funded or outside the banks’ arrangement. As a result of these actions the bank suffered proprietary prejudice and a gap in its Nostro position. You are required, within 3 days of your receipt of this letter, to submit a written response to these allegations. Kindly acknowledge receipt by signing the attached copy of this letter. Yours sincerely Nedbank Zimbabwe Limited Signed Mc Millan Nyagomo Chief Operating Office (Acting Head Treasury)” Chapatarongo, like Dube, reacted in this fashion: “9B Kineton Close Greystone Park Harare The Human Resources Manager Nedbank Zimbabwe 1th Floor Old Mutual Centre Harare 08 March 2019 RE:RESIGNATION FROM TREASURY 4 HH 54-20 HC 2679/19 HC 2872/19 HC 2955/19 HC 2873/19 Pursuant to my earlier resignation from my position as Foreign Exchange Dealer on Tuesday 5 March, 2019 please note that it is now with immediate effect from the same date, 5 March 2019. I thank you for the time we served together which I will always cherish. Yours sincerely Signed Albert Chapatarongo.” A sample of the first three applicants’ letters instructing respondent to make the foreign currency payments reads thus: “STENHOP INVESTMENTS (PVT) LTD P.O. BOX CY 1423, Causeway, Harare, Zimbabwe 27 November, 2018 The Manager Exchange Control Department Nedbank Bank Jason Moyo Branch Harare Dear Sir or Madam PAYMENT OF FOREIGN BILL-TSC 180416 US$84, 150-00 We hereby submit our application to pay US$84 150-00 (Eighty Four Thousand One Hundred and Fifty Dollars Only) being payment for raw materials. The bank details are as follows: BENEFICIARY : TAESUNG CHEMICAL COMPANY LTD BANK : WOORI BANK OF KOREA BRANCH : JASMIL TOWN BRANCH SWIFT CODE : HVBKKRSE ACCOUNT NUMBER : FET 5618000125 REF : TSC 180416 Kindly debit our FCA account number 21031008567 with the same and all the related bank charges. 5 HH 54-20 HC 2679/19 HC 2872/19 HC 2955/19 HC 2873/19 Thank you for your assistance. For and on behalf of STENHOP INVESTMENTS (PRIVATE) LIMITED Signed Signed Authorised Authorised Signatory Signatory Directors: Y.S. Baek, Y.C. Baik, M. Macheka, T.I. Baik” I do not agree with Advocate Sithole, for the applicants, that respondent created a fictitious set of facts to justify the action that it took. The facts speak for themselves. The bank accounts which applicants asked respondent to debit were not, in all cases, foreign currency accounts. Applicants knew that very well. They were all RTGS accounts. Applicants did not instruct respondent to debit the RTGS bank accounts. The RTGS accounts were for local payments. In an endeavour to cover up for their fraudulent activities, and with the active complicity of the respondent’s said treasury department employees, applicants procured the use of the RTGS account at a time when applicants either had no or inadequate foreign currency standing to the credit of its Nostro account to meet its out of Zimbabwe obligations. In other words, applicants one to three made use of foreign currency that it did not have. Dube and Chapatarongo helped applicants to “beat the system.” These two did not refute this. No supporting affidavits bearing their names are part of the applicants’ papers. Indeed, instead of responding to the substance of the allegations contained in the letters of suspension, Dube and Chapatarongo, to make impossible the holding of disciplinary hearings against themselves, promptly resigned. I agree with Advocate Mpofu, for the respondents, that “the guilty flee when no man pursueth.” It is correct that Dube and Chapatarongo have not been convicted of the criminal offence of fraud. It also is true that they have not been convicted of fraud in terms of the labour laws of this country. But it would be mischievous were I to ignore the clear evidence of the fraud perpetrated in acquiring the foreign currency in this case. The characterisation of applicants as having reaped where they did not sow is apt. 6 HH 54-20 HC 2679/19 HC 2872/19 HC 2955/19 HC 2873/19 Against this backdrop, applicants ask me to grant a declaratory order and consequential relief. The remedy sought is the same in all cases. I have therefore omitted the account numbers, amounts and dates because those differ from applicant to applicant. Thus edited, the relief sought reads: “DRAFT ORDER ......... IT IS ORDERED THAT: 1. The respondent’s action of garnishing or debiting the applicant’s Nostro (FCA) account number ..... of the sum of US$ ..... on the ....... and also applicants’ RTGS account Number ........ of the sum of ....... on the ..... be and is hereby declared null and void. 2. The respondent be and is hereby ordered to restore and reimburse all the amounts unlawfully debited or garnished from applicant’s Nostro (FCA) account number .... with effect from the ..... to date. 3. The respondent be and is hereby ordered to restore and reimburse all the amounts unlawfully debited or garnished from applicant’s RTGS account number 21031008567 with effect from the......... to date. 4. ................ 5. The respondent be ordered to pay costs of suit on attorney-client scale.” The circumstances in which this court may grant a declaratory order are well settled. See Munn Publishing (Pvt) Ltd v Zimbabwe Broadcasting Corporation 1994 (1) ZLR 337 (S); Streamsleigh Investments (Private) Limited v Autoband Investments (Private) Limited SC 43/2014. The law was accordingly not debated before me. The application is without merit. It is common cause that in opening the bank accounts each applicant entered into a written agreement with the respondent. The contract reads in relevant part: “TERMS AND CONDITIONS 1. TERMS/SCOPE The information contained herein together with any further instructions and conditions that may be prescribed by the Nedbank Limited herein shall be called “the Bank” from time to time shall constitute the terms of the agreement between the customer and the Bank. When this application form has been signed, it will be deemed to have been accepted as binding on the customer and the bank representative office or affiliate where the account is held. These conditions apply to each account opened under the account opening form or in any other acceptable manner 6….