THE High Court has stopped the liquidation and distribution of accounts in the estate of the late business mogul Edward Nyanyiwa, who was better known as Eddies Pfugari. This follows a controversial rush by the executor, Clever Mandizvidza, to dispose of the estate.
Mandizvidza has however been removed from the position after Nyanyiwa’s daughter Henrietta approached the High Court following discomfort over the way Mandizvidza was running the estate’s affairs. High Court judge Justice Owen Tagu upheld her concerns.
“Whereupon after reading documents filed of record and hearing counsel it is ordered that the Master of the High Court’s decision to confirm Mandizvidza’s interim liquidation and distribution accounts in the estate of the late Edward Nyanyiwa under DR number 471/19 be and is hereby set aside.
“The interim liquidation and distribution accounts filed by Mandizvidza in the estate of the late Edward Nyanyiwa under DR 471 /19 be and are hereby set aside.
“Mandizvidza be and is hereby removed from the position of executor dative for Estate Edward Nyanyiwa DR 471/19.
“The master of the High Court shall within 10 days of being served with this order appoint an impartial person to carry out a valuation of the shares held by the late Edward Nyanyiwa in all the companies that the estates have interest in.
“It is hereby declared that the executor for the estate of the late Edward Nyanyiwa shall charge his fees at five percent of the gross value of the state,” ruled the judge.
The Master of the High Court was cited as the first respondent in Henrietta’s application. Mandizvidza was cited as the second respondent while Eddies Pfugari (Pvt) Ltd and E Pfugari Properties (Pvt) Ltd are the third and fourth respondents respectively. Henrietta is one of the late property mogul’s five children who are embroiled in a vicious wrangle over their father’s US$30 million estate.
Pfugari, one of the pioneers of Zimbabwe’s black economic empowerment crusade, died on 10 February 2019 at his Milton Park home in Harare, leaving behind a massive business empire under the flagship E Pfugari Properties (Private) Limited and a number of assets.
Henrietta had told the court that the Master’s decision in both respects of approving the interim liquidation and distribution accounts and retaining Mandizvidza as an executor of her father’s estate was irrational, biased and unreasonable.
She said on 25 August 2020 her lawyers wrote to Maandizvidza expressing concern on his hurried desire to dispose of assets to raise administration costs that had not been properly ascertained. Mandizvidza was charging 15% for his services instead of only 5%.
He was also confronted by Henrietta over the failure to carry out a proper valuation of shares owned by her father in the various companies he had interests in, particularly the failure and refusal to take into account the liabilities of those companies in determining the value of the shares as well as the unlawful disposal of company assets as opposed to the deceased’s shares in those companies.
It was Mandizvidza’s refusal to rectify the errors followed by his persistent and frantic desire to quickly dispose of company assets and allocating the bulk of the proceeds to himself while leaving the beneficiaries to inherit valueless shares of insolvent companies, which prompted Henrietta to approach the Master of the High Court.
Surprisingly, the Master of the High Court did not see anything wrong with what Mandizvidza was doing. Henrietta argued that the first schedule to the Estate Administrators (Registration and Examinations) Amendment rules, 2018) No.4) SI 59/18 provides that an executor’s fees on the gross value of assets is 5%.
She said the Master of the High Court’s actions and interpretations of regulations was flawed and strange that it left her feeling he was biased in favour of Mandizvidza Mandizvidza however refuted the allegations against him and the liquidation account.
In relation to allegations of improper valuation of the late Edward Nyanyiwa’s shareholding, his defence was basically that the valuation had been done purely under section 6 of the Estate Duty Act and that the auditors who had valued the companies had taken into account all relevant facts and considerations.
On the question of his charges, his response was that the applicant had failed to demonstrate how the estate had been overcharged and that he simply taxed the estate as informed by statute.
The Master of the High Court then agreed with the executor that section 6(g) (iii) is applicable in the valuation of company shares and that this approach had not been formally challenged to date. But the High Court judge ruled that Mandizvidza’s fee was too high before chucking him out as the executor. — STAFF WRITER
