Businessman challenges bond notes introduction

HARARE businessman, Frederick Charles Moses Mutanda has approached the High Court challenging the planned introduction of bond notes, saying the move by the Reserve Bank of Zimbabwe (RBZ) is unconstitutional and an infringement on his fundamental rights. BY CHARLES LAITON

Source: Businessman challenges bond notes introduction – NewsDay Zimbabwe September 23, 2016

Mutanda’s application comes shortly after former Vice-President and opposition Zimbabwe People First leader Joice Mujuru filed a similar court challenge against the proposed bond notes.

Mujuru’s case is set to be heard at the Constitutional Court on Wednesday next week.

RBZ governor John Mangudya has indicated that the bond notes would be released into the market next month.

In his application filed on Wednesday, Mutanda said he had approached the court in his personal capacity after realising that his constitutional right to freedom was being or likely to be infringed by the central bank’s move.

Mutanda said the proposed bond notes, as a form of legal tender or currency for purposes of domestic transactions alongside other legitimate legal tenders, would violate his constitutional right.

The Caps Holdings major shareholder also said he had concerns over the expropriation of export proceeds earned by exporters, for summary placement in the central bank’s nostro account, adding there was nothing to back up the RBZ’s electronic “credits” or “payments” back into the same accounts.

“This conduct flies in the face of section 317 of the Constitution concerning the governor and the central bank’s duties and obligations to sound fiscal management; and/or the founding value of section 3 (1) (h) of the Constitution concerning good governance,” Mutanda said in his founding affidavit.

He accused Mangudya of not telling the truth about the true nature of the bond notes.

“I suspect the governor distanced himself from calling the bond notes legal tender and/or bank notes and/or currency, which is what they are or will be, because he knows there is a very specific statutory process for the introduction of legitimate legal tender/bank notes/currency and he has not followed that route,” he said.

“His (Mangudya) bond notes scheme has not followed the correct statutory route for its approval and introduction for use by the public and not just a specified segment of the public being exporters. I am also of the view that the governor is acutely aware of the public’s general opposition to the introduction or threat of a fresh form of Zimbabwean currency in the same category as the despised bearer cheques which contributed to hyperinflationary and general misery inflicted on the public.”

Mutanda cited the RBZ, Mangudya, Finance minister Patrick Chinamasa, Stanbic Bank and Attorney-General Prince Machaya as respondents.