Moffat Mungazi
Lovemore Kadzura
Post Reporter
PROMINENT Mutare pharmacist, Douglas Chiutsi, was last week arrested for allegedly attempting to defraud his business partners of over US$900 000. Chiutsi (38), is facing three counts of fraud, including producing a fake company valuation report, and submitting a falsely sworn affidavit to the High Court.
Chiutsi, represented by Mr Chris Ndlovu of Goneso and Ndlovu Legal Practitioners, pleaded not guilty when he appeared before Mutare magistrate, Ms Perseverance Makala.
He was granted US$500 bail on the usual conditions and is set to return to court on February 11, 2025.
Prosecutor, Mrs Joice Tinarwo told the court that Chiutsi, a former managing director of Healthwell Pharmacy t/a Clique Pharmacy, allegedly withheld crucial information from his partners, Mr Simbarashe Mushambi Dube and his wife, Mrs Paula Dube.
Chiutsi reportedly failed to disclose that the Medicines Control Authority of Zimbabwe intended to shut down their business due to serious compliance issues.
Instead, Chiutsi allegedly presented a fake business valuation from a non-existent company and offered to sell his shares, valued at US$927 434, 64, to his partners.
This was despite knowing that the company was facing imminent closure.
“On March 17, 2017, Douglas Chiutsi entered into a partnership to register Healthwell Pharmacy, trading as Clique Pharmacy, through a shareholder agreement. The agreement allocated 33 percent of the shares to Chiutsi, 33,5 percent to Simbarashe Mushambi Dube, and 33,5 percent to Paula Dube.
According to the shareholder agreement, any party wishing to dispose of their shares must first offer them to the company. If the company declines, the shares are then offered to other shareholders, and finally to the general public.
“On March 19, 2024, the Medicines Control Authority of Zimbabwe conducted an inspection of Clique Pharmacy, uncovering seven offences, two of which were critical. As a result, the pharmacy’s licence was set to be withdrawn, and the business was to be shut down. The findings of the inspection were communicated directly to Chiutsi by MCAZ on April 8, 2024.
“Despite being aware of the impending closure, Chiutsi failed to disclose this information to the company or its shareholders. Instead, on April 29, 2024, he wrote to Healthwell Pharmacy, offering to sell his shares to Dube, as per the shareholder agreement,” said Mrs Tinarwo.
Mrs Tinarwo said Chiutsi was aware of the potential closure and intended to have Clique Pharmacy act on his offer, potentially prejudicing the company.
“Chiutsi knew that Clique Pharmacy faced imminent threat of closure as a result of the findings of the inspection and intended to have Clique Pharmacy act on his offer to its potential prejudice,” said Mrs Tinarwo.
Chiutsi allegedly presented a fraudulent business valuation report at the High Court in Harare, claiming it was prepared by Afroserve Management Consulting Chartered Accountants.
However, it is alleged that the report was fake and that the person who supposedly signed it, Richard Banda, does not exist.
Interestingly, there is a Richard Eferemu, who is the director of Afroserve Management Consultants, a registered company.
“On August 30, 2024, and under High Court Case Number HCHC 584/24, Chiutsi produced a fraudulent business valuation report of Healthwell Pharmacy (Pvt) Ltd which he purported to have been prepared by Afroserve Management Consulting Chartered Accountants on May 31, 2024, stating that the business of the complainant was valued at US$2 810 408, and that his share value was US$927 434, 64.
“The supplied address of Afroserve Management Consulting Chartered Accountants was 5th Floor, Advern House, 21 Innez Terrace Road, and Corner Robert Mugabe, Harare. Detectives visited the given address and located Richard Eferemu of Afroserve Management Consultancy (Pvt) Ltd whom they interviewed. He indicated that he was popularly known as Richard Banda and that he was the Director of Afroserve Management Consultants.”
“He indicated that he did not know or own the company namely Afroserve Management Consulting Chartered Accountants. He denied having been consulted by Chiutsi or to have carried out any business valuation exercise.
“Chiutsi personally intended to use the said report to claim a total of USD927 434,64 from Healthwell Pharmacy or its shareholders, thereby intending to cause prejudice in the sum of USD927 434,64.
“On December 2024, Dube filed an application against the so-called Afroserve Management Consultancy and Chiutsi in the High Court at Harare under Case Number HCH5559/24 in which it sought to have the purported business valuation report set aside. On December 20, 2024, and in response to Dube’s application, Chiutsi filed an affidavit purportedly signed and sworn to by one Richard Banda on behalf of Afroserve Management Consultancy. The affidavit had a Harare address which is 5th Floor, Advern House, 21 Innez Terrace Road Corner Robert Mugabe, and purported to have been commissioned in Mutare,” said Mrs Tinarwo.
She further said Mr Eferemu denied ever conducting a business valuation report for Healthwell, adding that Afroserve Management Consulting Charted Accountants does not exist.
