S v PAZVAKAVAMBWA 1998 (2) ZLR 125 (S)

Flynote

Criminal law — statutory offences — corruption — Prevention of Corruption Act [Chapter 6:16] — s 3(1)(f) — agent failing to disclose transaction, with intent to deceive and obtain a consideration for himself — managing director of company authorising loan and donation to co-operative in which he had an interest — whether director was obliged to disclose loan and donations to board of directors

Headnote

The managing director of an insurance company, NICOZ, had authorised a loan and two donations from NICOZ to a co-operative society, a society in which he was a shareholder. He had also authorised two donations from NICOZ to the ZANU (PF) Women's League. He had not disclosed any of these transactions to the board of directors of NICOZ. He was convicted of five counts of contravening s 3(1)(f) of the Prevention of Corruption Act [Chapter 9:16], that is, failing to disclose the full nature of a transaction in connection with the principal's business with intent to deceive the principal and obtain a consideration for himself or others. In respect of this offence, once there is non-disclosure of a transaction, there is a presumption that there was an intention to deceive unless the contrary is proven.

Dismissing his appeal against conviction, Held, that the duty of a director of a company is to conduct the affairs of the company in the interests of the company and not for his own benefit. In regard to all of these transactions, the

appellant had had a duty not only to disclose the transactions to the board of directors but also to seek the authority of the board for them As regards the loan and gifts to the co-operative society, as he had a financial interest in the society, he was one of the beneficiaries of those transactions and he could not possibly have had authority to carry out these transactions without the knowledge and approval of the board. As soon as the conflict of interest arose, he had the duty to seek the authority of the board. As regards the donations to the Women's League, it was the clear practice in NICOZ that the board of directors authorised all donations. The appellant knew of this practice and this knowledge overrode any argument that he could act on his own initiative in terms of the provisions of a power of attorney given to him by the company.

Held, further, that the presumption operated against the appellant that he had carried out these transactions with intent to deceive his principal and to obtain a gift or consideration for himself or any other person. He had failed to discharge the onus resting upon him to prove, on a balance of probabilities, that he did not have such intention. In respect of the transactions in relation to the co-operative society, he had deliberately deceived the board in relation to these transactions that had benefited himself and others. In respect of the donations to the Women's League, as a member of the political party concerned who had stood unsuccessfully in the party's primary elections, it wasclear that he could enhance his prospects of selection as a candidate by sponsoring these generous gifts and thus he had obtained a consideration for himself.