THE controversial Harare Airport Road construction project has exposed how businessman Ken Sharpe’s Augur Investments allegedly moved to transfer and hide vast tracts of land under several shelf companies to avoid litigation.
The matter came to light after a company contracted by Sharpe’s Augur Investments to construct the road linking the Robert Gabriel Mugabe International Airport with Harare’s central business district approached the High Court over non-payment for its role in the project.
The company, Fairclot Investments, trading as Trucking and Construction Pvt Ltd (T&C), is demanding the nullification of a deed of settlement between Harare City Council, the Local Government ministry and Augur Investments that saw the transfer of 273 hectares of land in the leafy suburb of Pomona to a company known as Doorex Properties.
T&C says in court papers that it has unearthed other vast tracts of land that were transferred to a string of shelf companies owned by Sharpe’s Augur Investments.
Augur was controversially awarded the contract on May 30, 2008, without going to tender.
The company was supposed to construct the Harare Airport Road with an understanding that 90% of the costs would be paid in the form of land and 10% in cash.
The title deeds for the land, Stand 654, Pomona Township made up of state land identified as part of the deal were to be kept by a private law firm - Coghlan, Welsh and Guest until council approved the road project.
Augur went on to subcontract Fairclot, which withdrew all its equipment and stopped work on the road after only doing 2.7km of the 10km due to non-payment.
They renegotiated the deal and Augur gave Fairclot the Pomona stand, which it had obtained from Harare City Council as security.
The title deed of the land was kept as surety by Coghlan, Welsh and Guest for work done by T&C.
T&C says the land was transferred to Doorex Properties, a shelf company owned by Augur Investments despite the fact that the law firm is still holding the title deeds up to today. Coghlan, Welsh and Guest refused to hand over the title deeds for the land as they are holding it in trust for T&C.
Fairclot, which is represented by Mutumbwa Mugabe Legal practitioners, was owed US$4,8 million from which US$3,250 500 was payable in cash and US$1 459 500 was to be paid in form of land or equivalent cash value.
Despite an arbitration award, Augur has not paid its dues to Fairclot, the firm argues in court papers.
Augur claims it has settled the outstanding amount in RTGS after the enactment of SI33/2019 in February 2019, a claim denied by Fairclot.
The matter has been dragging in the courts and Fairclot, in an application to have Sharpe’s properties declared executable, disclosed that the businessman took land from council and hid it under various shell companies so that the land cannot be taken away by debtors.
Fairclot described Augur as a peregrine company registered in Mauritius with no assets to its name in Zimbabwe after transferring all land controversially obtained from the Harare City Council into several shelf companies.
Since Augur has no assets, Fairclot said it was difficult for the company to recover what it is owed and, therefore, wants the court to declare all the shelf companies linked to Sharpe executable.
Fairclot identified 13 shelf companies, listed as third to 16th respondents that it claimed Sharpe used to hide the land.
Augur, Fairclot added, has a propensity of not paying debts.
“Given the modus operandi of the first defendant, that it does not own assets in its own name but through subsidiary companies, a writ of execution against the first defendant will elicit a nula bona return,” Fairclot said.
“The properties that first defendants have earned through its business are hidden in the names of its subsidiaries.
“For the construction of the Airport Road, the first defendant was paid in land by the City of Harare.
“The various pieces of land availed to first defendant as payment for the Airport Road Project were directly transferred to and registered in the names of 3rd to 16th defendants.”
Fairclot said the immovable properties registered in the shelf companies belong to Augur.
The company gave details of the land transferred to each shelf company (shown in graphic).
“In furtherance of the asset hiding scheme masterminded by Sharpe, who was listed as the second respondent, Augur has initiated the disposal of assets and liquidation of the third (Waymark Investments) and fourth (West Properties),” Fairclot added.
“Accordingly, it is just and equitable that the properties registered under a third to 16th defendants be declared executable in satisfaction of plaintiff’s judgment debt against the first respondent.”
But Chinawa, Augur’s legal representatives, denied that the company was paragrine, but a company registered to do business in Zimbabwe.
According to court documents, Augur has no property registered under its name ever since its proprietors arrived in Zimbabwe, presenting the company as an international finance and construction company.
“The modus operandi (hiding assets) was replicated many times over with the effect that for more than 10 years that applicant has been operating in Zimbabwe, it has no movable or immovable property in its name. Effectively, the applicant is a shell,” Fairclot’s court papers read.
“This modus operandi has enabled applicant, over the years, to accrue obligations in its own name and yet receive income through its subsidiaries.
“The result was that applicant evaded its creditors, among them the first respondent (Fairclot)
“First respondent fell victim to this modus when applicant failed to pay it (and) has transferred to its subsidiaries the land it had received for the constructor contract.
In a letter to Mutumbwa dated June 6, 2019, Chinawa warned that Fairclot was engaging in a wild goose chase in trying to make the shelf companies executable.
Chinawa said each company has its own legal practitioners.
“We wish to advise you that you are embarking on a wild goose chase. In the spirit of good faith, we wish to highlight to you and be upfront about the fact that you are mistaken on the ownership of the various entities as they are not owned by the first defendant (Augur) as alleged in your aforementioned summons,” part of Chinawa’s letter reads.
Earlier that month on June 4, Chinawa and Law Chambers had written to Mutumbwa Mugabe and Partners saying that the shelf companies cannot be served any summons.
But Mutumbwa reminded Chinawa that he was once referred to a Mauritian address when they tried to serve Augur with some papers.
“You recall that the last time we attempted to serve your client summons in case number HC 4599/19, which is a claim to declare certain asserts executable in satisfaction of the judgement debt, you referred us to a Mauritanian address,” part of the letter by Mutumbwa’s letter to Chinawa, dated July 19, 2019, read.
In 2013, the Harare City Council was forced to cancel Augur’s Airport Road contract due to non-performance, but by that time, a lot of land had already been transferred to Sharpe’s firm.
Augur demanded a 35% termination fee, which was identified as the Pomona land measuring 40 665 hectares.
The High Court then granted an award of $3 million in favour of Augur, which was successfully challenged by the local authority.
Augur appealed and before the matter was heard, a tripartite deed of settlement between Local Government minister July Moyo, Augur and Harare City Council was signed.
The settlement gave Sharpe rights to the land and shielded him from prosecution.
Several court cases challenging the deed of settlement have been filed in the local courts.
Harare North MP Norman Markham has also challenged the settlement and exposed the alleged grand land heist triggered by the deed.
Last month, Harare land developer George Katsimberis approached the High Court seeking to have the criminal immunity granted to Augur Investments, a company reportedly registered in Ukraine, Estonia or Mauritius with extensive interests in Zimbabwe withdrawn arguing that it violates provisions of the constitution.
Katsimberis is also seeking to compel prosecutor general Nelson Mutsonziwa to prosecute Moyo, Augur Investments and its representative Aleshina as well as another company owned by Sharpe, Pokugara Properties who are cited as the second, third, fourth and fifth respondents, respectively.
Katsimberis is pursuing private prosecution of Sharpe and his associates.
Originally it as envisaged that the Airport Road project, which started in 2008, would provide a direct link from Enterprise Road (now Emmerson Mnangagwa Road) at its junction with Robert Mugabe (Mutare Road) in Eastlea on the eastern side of the central business district, passing over the National Railways of Zimbabwe marshalling yard and crossing the Mukuvisi River to Airport Road at Alamein Road.
Only a section of the road has been completed, but council has already lost vast tracts of land.
Augur’s contract valued at US$80 million was cancelled by the government due to its failure to perform.
Only 2,7km out of the envisaged 20km of the road was constructed by Augur who had subcontracted T&C to do the work. T&C argues that it was not paid for the work it did.
Augur was taken to an arbitration by T&C, which was awarded US$5 million . Sharpe’s company appealed against the order at the High Court and lost before it approached the Supreme Court and lost again.
The court papers said: “The immovable properties registered in the names of 3rd to 16th defendants in effect belong to 1st defendant (Augur)
“In furtherance of the asset hiding scheme masterminded by 2nd defendant (Kenneth Raydon Sharpe), 1st defendant has initiated the disposal of assets and liquidation of 3rd and 4th defendants.
“3rd to 11th defendants are not independent of 1st and 2nd defendants.”