The State v Moses Mpofu and Mike Chimombe

In 2021, the Government of Zimbabwe set up a Presidential Goat Pass-On Scheme to supply 500,000 goats to alleviate poverty. The Ministry of Lands advertised a tender requiring bidders to be registered companies that were tax compliant. A bid was submitted in the name of "Blackdeck Livestock and Poultry Farming," which was not a registered company but presented itself using legal documents belonging to Blackdeck (Pvt) Ltd, a registered company. The bid included falsified ZIMRA tax clearance and NSSA compliance certificates that were actually issued to Skywalk (Pvt) Ltd but altered to appear as if issued to Blackdeck (Pvt) Ltd. The Ministry awarded the tender valued at USD 87,757,168 and paid USD 7,712,197 into Blackdeck (Pvt) Ltd's bank account. The accused persons supplied only 4,208 goats valued at USD 331,445 and misappropriated the remainder by trading it on the black market. The 1st accused was a lawful director of Blackdeck (Pvt) Ltd and signed the contract on behalf of the fictitious entity. The 2nd accused attended meetings representing the bidder and his company Millytake Enterprises (Pvt) Ltd received ZWL 200 million from the proceeds, which was also traded on the black market.

• Whether submitting a bid in the name of a non-existent entity using stolen corporate identity constitutes fraud
• Whether the use of falsified ZIMRA and NSSA certificates constitutes misrepresentation
• Whether the corporate veil protects directors from personal criminal liability for fraud committed through a company
• The criminal liability of co-perpetrators under section 196A of the Criminal Law Code
• The application of section 277 of the Criminal Law Code regarding criminal liability of company directors
• Whether circumstantial evidence was sufficient to prove the 2nd accused's participation in the fraud

Both accused persons were found guilty of fraud as charged. Written reasons for the verdict were provided following an earlier ex-tempore judgment.

The binding legal principles established are: (1) Under section 277 of the Criminal Law Code, directors are deemed criminally liable for criminal conduct of their company unless they prove on a balance of probabilities they took no part in it - the corporate veil does not protect directors in criminal proceedings; (2) A fictitious entity created by stealing the corporate identity of a registered company through use of its legal documents constitutes fraud when used to obtain a government contract; (3) Submitting a bid in the name of an unregistered trade name that is not registered under section 29 of the Companies and Other Business Entities Act, combined with falsified compliance certificates, constitutes misrepresentation under section 135 of the Criminal Law Code; (4) A person who controls or participates in the affairs of a company without lawful authority qualifies as an unlawful "director" under section 277 and bears the same criminal liability; (5) Under section 196A, co-perpetrators may be convicted where evidence shows each had the requisite mens rea and their association in preparatory conduct or presence at the scene implicates them; (6) Circumstantial evidence is sufficient for conviction where the totality of independent circumstances point inexorably to guilt and exclude every reasonable inference consistent with innocence.

The court observed that the trial could have been conducted more efficiently as a "special case" given that material facts were largely undisputed, with only legal questions remaining. The court noted with concern the neglect of Ministry officials to verify ZIMRA and NSSA certificates despite security features requiring verification, and their failure to notice the use of multiple names by the bidder. The court commented that the Criminal Law Code, effective from 1 July 2006, is now the primary source of criminal law in Zimbabwe and care must be taken when citing pre-codification cases. The court noted the irony that both accused persons attempted to hide behind the corporate veil they had criminally created. The court observed that lobbying for policy preferences is lawful but canvassing for a particular bidder interferes with due process in procurement. The judgment criticized the defence strategy of the 1st accused who initially indicated he would call five witnesses but then closed his case without calling them, failing to discharge the burden placed on him by the proviso to section 277(3).

This case is significant for establishing important principles regarding: (1) the criminal liability of company directors under the codified criminal law in Zimbabwe, particularly section 277 of the Criminal Law Code which pierces the corporate veil in criminal matters; (2) the inapplicability of the corporate veil as a defence in criminal proceedings where directors participated in fraudulent conduct; (3) the definition and treatment of fictitious entities created through identity theft of registered companies; (4) the application of the doctrine of common purpose and co-perpetrators in fraud cases under section 196A of the Criminal Law Code; (5) the use of circumstantial evidence to prove association and participation in corporate fraud; (6) the requirement under the Companies and Other Business Entities Act that assumed/trade names must be registered to be lawfully used; and (7) the interpretation of fraud in public procurement involving misrepresentation of corporate status and tax compliance. The judgment emphasizes that the Criminal Law Code, not common law, is now the primary source of criminal law principles in Zimbabwe.