By A Correspondent| City of Harare has lost over 200 hectares of prime land after being hoodwinked into a joint venture agreement with an Estonian registered company owned by controversial land developer and businessman Kenneth Raydon Sharpe for the construction of houses, a hotel and truck in among other planned projects.

The agreement which was signed in 2007 has not materialized to this day as the Sharpe’s company Augur Investments OU has not honoured its pledge to contribute between US$20 and US$30 Million into the deal.

This is contained in a High Court challenge filed by an organisation called Homeless People Federation together with former City of Harare Councilor Warship Dumba and Knowledge Tinashe Kwambana, a Harare resident.

The litigants want the Memorandum of Understanding and the Shareholder Agreement between Sharpe and Harare that culminated in the formation of Sunshine Development Private limited to be declared null and void.

In their High Court challenge, the litigants said the joint venture agreement was just a corrupt vehicle to extract land from the City of Harare by Sharpe.

According to the court challenge seen by ZimEye, the joint venture resulted in a 70-30 share agreement between Augur Investments and City of Harare with the former getting the lion’s share.

As part of the joint venture agreement, City of Harare was expected to contribute land amounting to 99,4197 hectares.

But the litigants felt the agreement prejudiced City of Harare since the value of land it contributed was over US$45 Million as per an independent valuation done by Mike Juru of Intergrated Properties Private Limited.

With indications that Harare ended up transferring 239,3823 hectares, the litigants questioned the logic of City of Harare continuing with an agreement which was tilted in favour of Sharpe.

Dumba wants to know how the 70-30 shareholding agreement was arrived at as it is not explained in the Memorandum of Agreement.

“Besides the above obvious corruption, there is no explanation in the Memorandum of Agreement or in the Shareholder’s Agreement why the shareholding structure is 70 to 30 in favour of Augur Investments OU,” said Dumba.

Dumba also questioned the criterion used to select Augur Investments to be development parter of the City of Harare.

“There was no defined criterion as to why Augur Investments OU was selected to be the development partner of the City of Harare,” reads Dumba’s High Court challenge.

Dumba and his co-litigants also poked holes in the registration and existence of Augur Investments which is registered in Estonia as opposed to Ukraine as indicated in the Memorandum of Understanding signed with City of Harare.

“The Augur Investments itself is a fraud. The Memorandum of Understanding signed on the 22nd of June 2007 with the City of Harare refers to Augur Ltd a company registered in Ukraine,

“On the contrary the Shareholders Agreement refers to Augur Investments Pty Ltd as a company registered in Estonia,” further reads Dumba’s Court challenge.

A Zimbabwe Anti-Corruption Commission (ZACC) investigation also showed that Augur Investments was not Ukrainian but Estonian and its address was questionable as it showed a flat in an industrial area.

“Although it claims to be a Ukrainian company, investigations by the Zimbabwe Anti-corruption Commission show that in fact it was registered in Estonia as an Estonian company. And according to papers filed in the Estonian Registry, Augur Investments OU lists Ranakupst 12 Tallin 10917 Estonia as its physical address. However this address is more flat in an industrial area in Tallin the capital city of Estonia,” said Dumba.

More worrying to Dumba and his co-litigants was the fact that City of Harare negotiated and agreed to a deal with a non-existent company which according to the Commercial Registrar of Estonia was registered on 7 September 2007 which was a day before the Memorandum of Understanding was signed.

“The shareholders Agreement between Augur Investments and the City of Harare which created the Joint Venture Sunshine Development Pvt Ltd was signed on the 4th of September 2007 as pointed out above. Only a day after the official registration of Augur Investments OU in the commercial Registrar of Estonia.

“This in fact means that the negotiations pertaining to the Shareholders Agreement were commenced and concluded before Augur Investments was officially registered in Estonia,” added Dumba.

He further told the court that while City of Harare did put land upfront, Sharpe’s Augur Investments did not put anything and to this day havent done so raising suspicions of Sunshine Development being created as a fraudulent vehicle of extracting land from the municipality.

The Joint venture agreement was expected to result in the construction of a hotel, truck inn and shopping centre among other developments.