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Multi-million dollar whistleblowing corruption scandal rocks Zimra

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Zimra in property deal whistle-blowing scandal

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THE Zimbabwe Revenue Authority (Zimra) is caught in yet another scandal involving the sale of a multi-million-dollar warehouse by two Harare businessmen who allegedly prejudiced the tax authority revenue, we can report.

BERNARD MPOFU

Information gathered by The NewsHawks shows that a local property firm brokered a deal which involved the sale of a warehouse in Harare’s southern townships, but violated the country’s tax laws by wiring the proceeds of the sale to a tax haven.

It is understood that the owners of Waterfalls Industrial Park, which is also known as the Remainder of Subdivision Derbyshire, gave Bard Real Estate the mandate to sell the property and the property firm began negotiations with a potential buyer in 2009.

The seller’s mandate, according to documents seen by The NewsHawks, was that Bard was to be paid the commission once the deal was completed.

The owners—Glen Hoaks and Richard Pearl and controversial Chinese businessman Sam Pa — reportedly agreed to bypass the property company once terms had been agreed. Documents show that they then invited another agent who facilitated the sale and did not pay value added tax which would have been mandatory for the sale of the property. Vat is applied on the disposal of fixed property in terms of section 6(1)(a) of Value Added Tax Act.

The property, which was initially valued for US$10,5 million but was sold for US$9.5 million. Bard was expected to get US$475 000 in commission (5% the cost of the property). In 2017, Zimra took Glen Hoaks, Richard Brian Pearl and another person to the Fiscal Court over the matter.

In 2014, the United States Treasury’s Office of Foreign Assets Control sanctioned Sam, as well as an Angolan businessman and a former ally of Zimbabwe’s long-time leader, the late Robert Mugabe.

Sam, who had a fallout with Mugabe at the time of his death over a property in Hong Kong, was designated for undermining democratic processes and institutions in Zimbabwe, facilitating public corruption by Zimbabwean senior officials through illicit diamond deals, and providing financial and logistical support to Zimbabwe and specially designated nationals.

A whistle-blower then approached Zimra and made a report on how the tax authority had been prejudiced of tax when the property was disposed of.

“The proceeds of the sale went to the private use and benefit of Richard Brian Pearl who instructed that the purchase price be paid into his company in Mauritius. Thus as such the beneficiary of the sale proceeds (that is), R.B Pearl owes the sold company money and it is prudent that Zimra should recover their money from properties that he owns,” one of the documents addressed to Charles Jaure, Zimra’s former commissioner in charge of revenue assurance and special projects.

“Zimra should seriously make an effort to recover monies owed to it as the sale proceeds were paid outside the country to evade paying tax and should consider the following options, placing caveats on properties owned by R.B Pearl and disposal of the said properties by way of auction.”

Questions sent to Zimra were not responded to at the time of publication.

Derbyshire Industrial Park is located 15 kilometres from the city centre down Simon Mozorodze Road and along  Chitungwiza Road. The property is visible from the road but is not directly against the main Chitungwiza highway.

Access to the facility is by means of a short private tarred road off  Chitungwiza Road. This private road leads to the controlled entry and exit to the complex where the guard house is situated.

The complex, which is registered as Combined Storage Services, is prime industrial property situated in Harare’s Waterfalls suburb.

The main features of the property include 32-acre well-maintained land, with expansion prospects; 10 acres of modern engineer-designed maintenance-free factory buildings; one free-standing unit of 1 000 square metres.

The property also boasts of nine free-standing units of 200 square metres; covered loading bays; guardhouse for controlled entry and offices, canteen and ablution facilities and free-standing units of 10 730 square metres.

Within the property are 12 free-standing maintenance warehousing units totalling a covered floor area of 40 460 square metres.

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