Magaya suffers crumbling defeat at High Court

The High Court has ordered Prophetic Healing and Deliverance (PHD) Ministries founder Walter Magaya to repay US$3 million to his Israeli business partner, ruling that failure to settle the debt could result in the attachment and sale of his hotel property.

In a strongly worded judgment delivered by Justice Maxwell Takuva, the court dismissed Magaya’s defence that the agreement was invalid under exchange control regulations and ordered him to pay the full amount with interest calculated at 3 percent per month, compounded monthly, from 1 July 2022 until payment in full. The court also awarded costs against him on a higher scale.

The dispute stems from a Memorandum of Agreement signed on 12 May 2022 between Magaya and Israeli businessman Ronny Aharon Musan Levi. Under the agreement, Levi advanced US$3 million for a mining venture, with Magaya undertaking to register a first-ranking mortgage bond over Yadah Hotel Properties within 30 days as security. Court papers show that the bond was never registered and no repayment was made.

Magaya, through his lawyer Advocate Garikai Sithole, argued that the transaction was void for lack of approval from the Reserve Bank of Zimbabwe in terms of exchange control regulations. He further contended that the agreement was illegal and unenforceable and suggested that any repayment could be made in local currency.

Justice Takuva rejected the argument, ruling that exchange control regulations govern residents and cannot be used to invalidate an agreement after a foreign national has injected capital into the country. The judge held that Magaya could not rely on his own failure to seek regulatory approval as a basis to escape liability, stating that permitting such a defence would effectively sanction unjust enrichment.

The court found that Magaya had received and benefited from the full US$3 million and was therefore obliged to honour the terms of the agreement. The ruling authorises the execution of his immovable property should he fail to pay the debt.

In his judgment, Justice Takuva criticised Magaya’s conduct, noting that it stood in sharp contrast to the principles he professes as a religious leader. The remarks add a moral rebuke to a decision that carries significant financial consequences.

The ruling comes as Magaya faces separate criminal proceedings on four counts of rape involving adult congregants in Harare and Chegutu. He denies the charges. During recent proceedings in that matter, his legal team sought the recusal of prosecutor Tendayi Shonhayi, alleging bias linked to her membership in a church led by Emmanuel Makandiwa.

With the High Court order now in place, Magaya faces mounting legal and financial pressure as enforcement proceedings loom over his hotel assets.