High Court orders forensic audit into Zvobgo’s estate 

Source: High Court orders forensic audit into Zvobgo’s estate –Newsday Zimbabwe

HIGH Court judge Justice Jacob Manzunzu has ordered a forensic audit into the estate of the late former Cabinet minister Eddison Zvobgo, after two of his children Rungano and Eddison Jnr, were accused of mismanaging the estate.

Jonas and Esther Zvobgo, represented by Munyaradzi Bwanya, approached the court seeking a forensic audit into the estate within three months saying they were losing out as minority shareholders.

They argued that Eddison, as the managing director of companies under the estate, is failing to pay taxes and exposing company assets to attachment by creditors.

In its application, the duo cited Eddison, Rungano, Zvobgo Holdings Private Limited, Kerina Makaita Zvobgo and Tsungirirayi Zvobgo as the first to fifth respondents, respectively.

The cited respondents are also shareholders in Zvobgo Holdings.

Eddison is the managing director of the Zvobgo empire that consists of several companies that include Perce (Private) Limited T/A Flamboyant Hotel, Nyuni Farm (Private) Limited and Chevron Hotel, among others.

The applicants said Rungano and Eddison had jointly conducted themselves in a manner that was grossly prejudicial to other beneficiaries’ interests.

They argued that Rungano and Eddison had repeatedly used the majority vote to conceal their refusal to account for the company assets or financial health of the estate.

“The obvious and constantly improving opulence of 1 and 2 respondents, including using company assets to support Eddison’s personal political ambitions as compared to the abject poverty of all other shareholders,” they submitted.

They further accused Rungano and Eddison of sourcing loans from various financial institutions without their knowledge, exposing other shareholders and  risking forfeiture of company assets.

“Eddison and Rungano have authorised or condoned litigation in the name of the company/companies without approvals or knowledge of the other shareholders. When confronted to account for the decisions, Eddison deployed the use of violence against one of the beneficiaries of the estate.”

In his affidavit, Jonas submitted that sometime in 2022 he learnt that Eddison had approached CBZ Bank to borrow US$2 million without a board resolution.

“Myself, Esther and  respondent 4 and 5 were concerned by this development given the background that Eddison has previously applied for and secured other bank loans without approvals…I then wrote a letter to the bank…It became clear at that meeting that the shareholders who were generally opposed to the loan application challenged Eddison,” Jonas submitted.

The applicants also argued that there is a conflation of roles and corporate governance issues after Eddison assumed duty as a shareholder, director, managing director and secretary of companies under the estate.

“Eddison admits in his sworn affidavit filed in HC2443/21 to third parties that he is conflicted in these roles yet he persists without resolving the same. When he has been called upon to answer questions pertaining to day-to-day running of the company such as accounting for company assets and basic decisionslike his accommodation, he defaults (sic) to his majority shareholding to refuse to answer questions,” they submitted.

“In addition to the housing allowance he is receiving to rent accommodation of his choice, despite a request for him to desist from the abuse of the hotel, he insists on it. To place further context, his occupation of the presidential suite costs the shareholders over US$36 000 per year in addition to the US$30 000 he is already receiving for housing.”

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