A Johannesburg-based Zimbabwean woman is staring at final sequestration for receiving millions of rands from the illegal activities of her compatriot and lover, who lives in the UK, and is accused of R14 billion tax fraud. Picture: Cara Viereckl/Independent Newspapers
A UK-based Zimbabwean businessman has landed his lover in South Africa in trouble after she was found to have received almost R35 million of the £58m (nearly R1.4 billion) he is accused of misappropriating.
Patience Mwakurudza, a Zimbabwean who lives in Johannesburg, was provisionally sequestrated last month after Gauteng High Court, Johannesburg Judge, Norman Manoim, found that she received millions of rands from her lover Zwelithini Ncube over a number of years.
Ncube, a certified chartered accountant, is accused by the liquidators of his UK company Unified Payroll Limited (UPL) of using two intermediary firms, Applemed UK and Applemed SA, to channel funds to Mwakurudza.
He registered UPL in the UK in 2015 and was its founder, sole director and sole shareholder, with the company operating as an employment agency employing mostly healthcare workers and supplying them to other employment agencies, who would then link them to employers, who were primarily the UK’s National Healthcare Service Trusts.
Mwakurudza was employed as manager: compliance by Applemed SA, which is linked to UPL. The payment trail of the funds sought by UPL’s liquidators in the UK shows that they flowed from the company to Applemed UK, then Applemed SA and then into Mwakurudza’s bank account.
UPL’s UK liquidators have stated that Ncube is liable for just over £40m in respect of national insurance contributions (NICs) and pay-as-you-earn (PAYE) and £17m in respect of value-added tax (VAT).
According to court papers, UPL was not required to deduct PAYE and NICS but only VAT, which they failed to declare to the UK's tax, payments and customs authority His Majesty's Revenue and Customs (HMRC).
“In addition to the PAYE/NICs fraud, UPL also committed VAT fraud. As a business making onward taxable supplies for the purposes of VAT, UPL charged VAT for the supply of staff to its customers. UPL failed, however, to declare and properly account for the VAT received from its customers. UPL's records confirm that VAT was charged but not accounted for to HMRC,” its liquidators stated in court.
The liquidators also accuse Ncube of using Mwakurudza to conceal the flow of monies he unlawfully misappropriated from UPL to evade the company’s creditors, with their relationship enabling him to do so without the need for any paper trail beyond payments and withdrawals.
They allege that Mwakurudza committed several acts of insolvency and that between December 2017 and January 2022 she made payments from her bank account exceeding R43m.
In her defence, she did not dispute that the payments were made but insisted that they were made before UPL was liquidated, and that no creditors had claimed against her.
However, Judge Manoim concluded that the payments must have been dispositions made in contravention of the Insolvency Act, which states that a debtor commits an act of insolvency by making or attempting to make any disposition of any of their property which has, or would have, the effect of prejudicing creditors or preferring one creditor above another.
He found that the R43m that was disbursed from her bank account which would constitute a self-standing ground of insolvency in terms of the Insolvency Act.
The judge noted that her assets were valued at R25m while her liabilities exceeded R34.7m and she had outstanding debt of a bond on her property.
The liquidators also argued that Mwakurudza’s sequestration will advantage creditors as she owned unencumbered properties valued at R19m whose proceeds could be distributed to creditors.
Mwakurudza was found by liquidators to have received over R34.7m through intermediaries into her FNB bank account.
She was paid about R20.7m by Applemed UK, nearly R10.3m by Ncube and another R1.7m to Applemed SA.
Mwakurudza told the court she was an innocent scapegoat for Ncube’s fraudulent design, and that due to their relationship she was taken advantage of, was a junior player acting under orders and asked no questions. She did not contest that her lover misappropriated moneys from UPL but disputed that she was a partner in a fraudulent enterprise and believed the application for sequestration was unfounded.
“I did not know that the primary source of the income was from the applicant (UPL) as I never ran financial interest (sic) of Mr. Zweli Ncube. I did not play any pivotal role as I was never a director or shareholder of the applicant,” she explained.
Mwakurudza maintained that she did not know that the money originated from UPL and that Ncube never discussed with her how he made payments, and she did not know that the funds were fraudulently obtained.
In addition, according to Mwakurudza, Applemed SA was a legitimate company working on UPL’s behalf dealing with candidate compliance and customer service.
”There is a justifiable basis for the receipt of the funds, the liquidators are desperately looking for the money and they have targeted me with no factual and legal basis to do so. There is no shred of evidence that I colluded with Mr. Ncube to defraud anybody, I was never and I am not joint wrong- doer,” she added.
Mwakurudza’s lawyer Tafara Mukwani told the Sunday Independent that his client would be appealing Judge Manoim’s ruling.
”It was never money from fraudulent scheme, it’s a business that was run. Like me I am Mukwani Attorneys I am running a business, as I’m running a business I don’t pay my taxes, I open a consultant firm somewhere that helps me to do my job I don’t pay my taxes properly, VAT and everything then I get sequestrated as Mukwani Attorneys,” he explained.
Mukwani continued: “During the time that I was trading I made, say, R200 000 and in that R200 000, R50 000 was supposed to go to the tax authorities so that’s what we are fighting with the judge: how do you know that this money is part of fraud or it’s not part of fraud? It’s a very big issue”.
Mukwani said Mwakurudza was against publicity as it may damage her children and parents.
"We do hope the appeal will unveil the truths that were ignored by the judge," he said.
Mukwani added: "So the client is not willing to do any interview neither herself nor ourselves. We take instructions from (the) client".
Judge Manoim issued a rule nisi (interim order) on December 14 calling upon Mwakurudza and any interested parties to show cause, if any, to the high court on a date to be advised by the registrar, why her estate should not be placed under final sequestration and the costs of UPL’s application not be costs in the administration of her insolvent estate.