A recent High Court decision has dramatically altered the landscape surrounding employee theft in Zimbabwe. This ruling establishes a potentially far-reaching precedent: if an employee is convicted of theft, the court can now order the seizure of their personal property to compensate the victim, even if that property wasn’t acquired with the stolen funds.

This sharply contrasts with previous practice, where authorities primarily pursued assets directly linked to the proceeds of the crime. Now, even “clean” assets, demonstrably obtained through legitimate means, are potentially on the line.

The Case That Changed Everything

The ruling stems from the case of Phillip Tendenedzai v. The Prosecutor General. According to the facts of the case, Phillip Tendenedzai, a former driver and messenger for Optinova Eye Care, was found guilty of stealing US$13,147 from his employer. He was sentenced to five years in prison, with a portion suspended contingent on reimbursing Optinova Eye Care. When the funds could not be located, the Prosecutor-General applied for forfeiture of Tendenedzai’s property, valued at US$40,000, under the Money Laundering and Proceeds of Crime Act.

Justice Benjamin Chikowero granted the application, ruling that because the stolen money remained untraceable, property of equivalent value could be seized to compensate the victim, regardless of its origin.

The National Prosecuting Authority of Zimbabwe (NPAZ) welcomed this outcome, citing alignment with international best practices for combating economic crime and money laundering. They highlighted the principle of “substitute asset forfeiture,” which aims to prevent criminals from profiting, even when illicit gains are hidden.

The Rationale: Deterrence Over Recovery?

The court’s rationale, as expressed by Justice Chikowero, centres on deterrence. It acknowledges the risk that some individuals might view imprisonment as an acceptable consequence, willingly serving their sentences while anticipating the later enjoyment of their hidden loot. This ruling seeks to eliminate that incentive by making any assets vulnerable.

Think of it this way: the court is sending a clear message that theft from employers will not be tolerated, and criminals will not be allowed to profit from their actions, even if it means seizing assets they acquired honestly.

Potential Implications and Concerns

While the intent is laudable, this ruling raises several potential concerns.

• Shift to Trusts: This could push more people toward using trusts to safeguard assets. A trust, being a separate legal entity, could potentially offer some protection, although the legal landscape is constantly evolving. As we have pointed out in our article on estate planning, the area of trusts is an everchanging one.
• Unintended Consequences: This ruling carries a risk of deterring investment if individuals fear that legitimately acquired assets could be seized due to the actions of a rogue employee.
• Definition of “Equivalent Value”: Clarity is needed on how “equivalent value” will be determined. Will it be based on market value, replacement cost, or some other measure? Ambiguity could lead to disputes and inconsistencies.

Important Caveats

• Potential for Appeal: This ruling is not necessarily final and could be challenged in a higher court. The Supreme Court could ultimately overturn or modify this decision.

Frequently Asked Questions (FAQ)

What does this ruling actually mean?

It means that if an employee is convicted of stealing from their employer, the court can seize the employee’s assets to compensate the employer, even if those assets were not bought with the stolen money.

What if the stolen money is used to buy something specific?

In that case, the authorities would likely try to seize the specific item purchased with the stolen funds first. This ruling becomes relevant when the stolen money cannot be traced or recovered in its original form.

How does the court determine which assets to seize?

The court will likely consider the value of the stolen funds and then look at the employee’s assets, taking into account factors such as market value and the employee’s overall financial situation.