Prominent lawyer/businessman Tawanda Nyambirai is suing the Finance Minister Prof Mthuli Ncube for his conversion of bond coins/notes and RTGS balances into a currency (RTGS Dollars which have been deemed equal to the incoming Zim Dollar, by the same man).
Nyambirai’s issue stems from the fact that when bond coins/notes were introduced we were told they are equal to and representative of US$ dollars, so the subsequent shifts which followed have meant that the government and Mthuli exchanged these for US$ – “a stronger currency” as noted by the Urgent Chamber Application filed by Nyambirai.
You can read the full application below:
Application is hereby made for an order in terms of the draft order annexed to this application on the grounds that:
1. 1st Respondent prescribed or was deemed to have prescribed. the issue by the 2″ Respondent of an electronic currency called the RTGS Dollar in terms of Section 44C of the Reserve Bank of Zimbabwe Act (Chapter 22-151 as inserted by the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time Gross Settlement Electronic Dollars (RTGS Dollars)) Regulations, Statutory Instrument 33 of 2019. The RTGS Dollars ceased to be at par with the United States Dollars after the effective date.
2. As prescribed by 1st Respondent. 2nd Respondent compulsorily converted Real Time Gross Settlement system balances that were in United States Dollars other than those referred to in Section 44C(2) of the Reserve Bank Act. into RTGS Dollars. The bond notes and coins were also compulsorily delinked from the United States Dollars and were linked to the new RTGS Dollars on a 1:1 basis in accordance with the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time Gross Settlement Electronic Dollars (RTGS Dollars)) Regulations. Statutory Instrument 33 of 2019.
3. Before their conversion into RTGS Dollars, the Real Time Gross Settlement system balances and the bond notes and coins were at par with United States Dollars. In fact, the RTGS balances were actually United States Dollar Balances while Bond Notes and coins carried a promise to pay United States Dollars on demand. Therefore, the RTGS balances and the bond notes and coins represented a currency (the US Dollars) that was inherently stronger than the new floating RTGS Dollars. Only persons with foreign obligations have been allowed compensation based on the principle that they will pay RIGS Dollars for the US Dollar obligations on an exchange rate of 1:1.
4. By failing to provide for compensation to the holders of the RTGS balances and the bond notes and coins before their conversion to RTGS Dollars, the 1st and 2nd Respondents compulsorily deprived me and the members of the public who were holding the RTGS balances, Bond Notes. and Coins of our property in contravention of Section 71(3) of the Constitution of Zimbabwe.
5. 1st Respondent issued the Reserve Bank of Zimbabwe (Legal Tender) Regulations, Statutory Instrument 142 of 2019 in terms of which he provided that foreign currencies that are lawfully held by members of the public shall no longer be legal tender in any transactions in Zimbabwe with the exception of foreign payments, payments for import duties and payments for international airline services. 2nd Respondent operationalised Statutory Instrument 142 of 2019 by publishing the Exchange Control Directive RU102/ 2019. The provisions of Statutory Instrument 142 of 2019 and the Exchange Control Directive RU102/ 2019 are in contravention of Section 71(3) of the Constitution of Zimbabwe and therefore null and void.
6. The records of the RTGS balances that were converted to RTGS Dollars need to be preserved and the 1st and 2nd Respondents need to be prevented from implementing any policies, rules or regulations that could affect the rights of holders of RTGS balances and the rights of holders of foreign currencies pending the determination of this matter. The accompanying affidavit and documents are tendered in support of the Application.
Dated at Harare this 3`’ day of July 2019
To: The Registrar High Court of Zimbabwe Harare
The Minister of Finance and Economic Development 15t Respondent New Government Complex Cnr S Machel Ave/4m Street Harare
TAWANDA N AMBIRAI APPLICANT
ADDRESS FOR SERVICE:
The Applicant’s Address for Service is care of Mtetwa & Nyambirai Legal Practitioners, No.2 Meredith Drive, Eastlea, Harare.
Nyambirai’s thoughts when filing this lawsuit probably mirror a lot of the same thoughts shared by citizens who deposited US$ into bank accounts and then could no longer access them, only to gain access to the bond notes/RTGS dollar (whatever you wish to call it) which in fact is weaker than what citizens deposited.
It’s a pertinent issue and it will be interesting to see how the courts interpret this