Court orders forfeiture of tainted properties belonging to Lungu’s proxy
THE Economic and Financial Crimes Court has ordered the forfeiture of tainted properties belonging to Pittscon Zambia Limited, its director Peter Malao, former president Edgar Lungu’s frontman Emmanuel Sipande Mugala, Edson Mugala, Lucky Simbeye, Pumulo Malao, Royal park Proprietor Alexander Mumba Sakala, and Christine Kalelemba.
The EFCC said the eight have failed to prove that their cars, shops and houses in Chilanga were from a legitimate source, hence they should be forfeited to the State.
In this matter, Director of Public Prosecutions Gilbert Phiri moved a motion for the forfeiture of the accused properties on reasons that they were a product of grand corruption.
According to an affidavit in support of the notice of motion sworn by ACC investigations officer Mulenga Mulenga, the Commission received information that the interested parties had questionable wealth disproportionate to their income.
Mulenga said investigations revealed that Pittscon Zambia Limited owned a fleet of vehicles altogether valued at K7 million.
Lungu’s proxy Emmanuel Mugala owned 21 residential properties valued at K1 400,000.00, K3,400,00.00, K1,700,000.00 and K2,600,000.00.
Mulenga said that during his investigations he also established that Mugala possessed 14 shops valued at K5,900,000.00, 14 shops valued K7,600,000.00 and Subdivision F of Subdivision No. 26 of F/9/6
He said, in addition to the numbered plots Mugala also had various unnumbered plots whose value after valuation by the Government Valuation Department was K41,800,000.00
Mulenga stated that during his investigations which covered the period between 2018 and 2022, the only known source of income for Pittscon and Mugala was the Contracts for the periodic maintenance of selected feeder roads.
Mugala possessed four unnumbered plots valued at K26,300,000.00
For Peter Malao, his only source of income was derived from Contracts awarded to his company by the Ministry of Local Government for the periodic maintenance of selected feeder roads.
Mulenga said he also established that Edson Mugala who is the son of Emmanuel Mugala
owned 16 flats in Lusaka altogether valued at K25,900,000.00 and his only legitimate source of income was a small hardware named Two Brothers.
He said Luck Simbeya owns various properties namely Subdivision A of Subdivision No. 14 of Farm 916 comprising a four bedroomed house valued at K1,400,000.00, Subdivision 5 of Subdivision No.1 of Farm 916 comprising of a four bedroomed house valued at K1,200,000.00, Subdivision C and D of Subdivision 9 of Farm 916 comprising of eight residential units valued at K3,200,000.00 bringing the total value of the properties to K5,800,000.
According to Mulenga between 2018 and 2022, Simbeye’s only known source of income was derived from the contracts awarded to Pittscon for the periodic maintenance of selected feeder roads.
Pittscon was awarded four contracts by Ministry of Local Government for the construction and periodic maintenance of selected feeder roads and one of the requirements to be satisfied was that prospective bidders needed to have certain individuals as key personnel, without which, a Contractor would not be eligible to bid.
“Pittscon responded to the bidding documents issued by the Ministry of Local Government by submitting bids in which William Changamuka, Harold Makungu Chibwe, Nolias Kachasa, Ailola Maimbolwa, Lukona Mwewa and Baldwin Mwewa Chatupa were named as Key Personnel employed as Site Engineer, Geomatics Engineer, Earthwork Foreman and Laboratory Technicians respectively,” Mulenga said.
He stated that he established that the said key personnel did not consent to the use of their credentials in the bids that Pittscon submitted
“As at January 1, 2022, the Ministry of Local Government through the National Road Fund Agency (NRFA) had advanced payments in the sum of K199,828,137.00, the total sum of the contract was K264,464,513.67 of which the sum of K199,828,137.00 was received and a balance of K64,636,376.70 remained,”said Mulenga.
Pumulo Malao, Royal park Proprietor Alexander Mumba Sakala, and Christine Kalelemba declared interest in some properties subject to for forfeiture but did not file documentation on time to defend the properties from being confiscated.
During hearing, ACC prosecutor Daniel Ngwira said the interested parties did not show any evidence that they had other sources of income commensurate to the value of the properties they acquired between 2018 and 2022.
He said the properties should be forfeited because their value is disproportionate to interested parties’ known sources of income during the period of investigation.
Lawyer representing Malao, Sakala and Kalelemba, Leon Lemba said the application by the State should not be granted because it was based on mere allegations and not facts in line with Section 2 of the Forfeiture of Proceeds of Crime Act Number 19 of 2010 of the Laws of Zambia.
He said Section 2 of the Forfeiture of Proceeds of Crime Act Number 19 of 2010 of the Laws of Zambia, puts a responsibility on the prosecution to go to Court armed with facts indicating that the property sought to be forfeited is tainted.
Another lawyer a Mr Mukuka submitted that the application by Ngwira and Gloria Muyunda should not be granted because they did not discharged their burden of proof in the matter .
Mukuka said the four Contracts in issue are still valid and have not been terminated by the Ministry of Local Government as provided for in Clause 59 2(4) of the Contract.
But delivering judgement, High Court judge Pixie Yangailo, Ann Ononuju, and Vincent Siloam said Pittscon by submitting a list of Key Personnel who were not in its employ, misrepresented facts which was a fundamental breach of the Contract in line with Clause 59.1 and 59.2 (h)(ii)
Judge Yangailo said based on Section 31 of FPOCA, the State has on a balance of probabilities managed to establish that the properties acquired by the Interested Parties could be reasonably be suspected to be proceeds of crime.
“We say so firstly because the State has established that the second to fifth Interested Parties by false pretence submitted names to the Ministry of Local Government stating that they had Key Personnel in the employ of Pittscon Zambia Limited when in fact not,” she said.
“In our considered view, the submission of the names to Ministry of Local Government when the said Key Personnel did not consent and were not in the employ of Pittscon is a false pretence, which is a crime.”
The Court said it was satisfied that the properties in question are proceeds of crime because a common thread of illegality runs through from the time the false pretence was made up to the time property was acquired.
“The timing of the acquisition of the properties and the amounts involved, coupled with the fact that before the Contracts in issue were awarded, the Interested Parties had no income, triggers elements of suspicion,” judge Yangailo said.
“Having found that the submission of false information as regards Key Personnel amounted to false pretences, it follows that proceeds of the said Contract is tainted. This therefore, entails that the Interested Parties did acquire the interest in the property as a result of a serious offence.”
She said the validity of the Contracts does not mean no illegality was committed.
“We are of the firm view that the ACC has established on a balance of probabilities that the properties in issue are tainted properties. Having so found, we therefore Order that properties be forfeited to the State to be applied as the Applicant deems fit within the confines of the law.”
She also condemned the interested parties to costs.
By Mwaka Ndawa
Kalemba August 25, 2024.