Fraud accused Zinara directors walk free

Published: 31 August 2017

SENIOR Zimbabwe National Roads Administration (Zinara) executives arrested in June for alleged fraud and criminal abuse of office could walk free after Transport Minister Jorum Gumbo pressured the parastatal's board to withdraw the charges.

Zinara, which collects more than $200 million revenue annually from vehicle licencing and road tolls, has been accused of abusing funds meant to fix and maintain the country's road network, which is in a state of disrepair.

The roads agency suspended finance director Simon Taranhike, finance manager Shadreck Matengabadza, administration and human resources director Precious Murove and administration manager Peter Bweterere in July on charges ranging from money laundering to violating tender and procurement procedures, among others.

Matengabadza, Murove and Taranhike appeared in court last month facing criminal abuse of duty charges for allegedly embezzling $300 000 in a "currency trading scheme" involving dodgy cash transfers.

The Zinara board, led by acting chairman Wilfred Ramwi, who assumed the position early this month following the quiet departure of Albert Mugabe, reportedly took a unanimous decision to halt the court proceedings and reinstate the executives, after being directed by Gumbo.

Gumbo had censured the Zinara board and management for suspending the officials without consulting him.

"I want your board to take note that the chief executive officer and directors' posts are designated posts. Holders of these positions cannot be dismissed or suspended without the knowledge of the minister who approved the appointments," Gumbo charged at an August 4, 2017 meeting with the board, minutes of which are in the possession of this paper.

"The process of approving and appointing these people involves a number of government institutions, therefore you cannot unilaterally suspend or dismiss senior staff without reference to the minister. For any future actions on this regard stand guided accordingly, as any further breaches will not be tolerated."

The minister directed the board to work closely with Zinara management to avoid further embarrassment.

"I do not like an organisation under my purview which portrays a situation of chaos by having protracted investigations on matters that can be resolved expeditiously and using internal processes. The organisation attracts unnecessary attention and criticism when you run to newspapers on anything and everything that happens in the organisation," Gumbo added.

In a letter written to Gumbo in response to his directive, Ramwi said the board had unanimously agreed to drop both criminal and labour charges against the four.

"Sir, following the board's special meeting of 4 and 18 August 2017 at which presentations were made to the board by the affected employees, the board analysed the facts thoroughly and carefully, leading to a resolution to withdraw the case and work on the issues internally," Ramwi said in an August 23, 2017 letter seen by The Financial Gazette.

When they appeared in court separately last month, the executives faced allegations ranging from fraudulently transferring more than $2 million into bogus company accounts to using a deceased person's identity documents to set up a company and open a bank account.

The charges arise from Zinara's 10-year loan facility of $206 million advanced by the Development Bank of Southern Africa (DBSA) in 2011 for the construction and rehabilitation of the Plumtree-Mutare Highway.

DBSA nominated a local bank to facilitate the loan repayment through quarterly hard currency revenue accruing from Zinara's operations, for remittance to DBSA.

In the court case, the State alleges that due to foreign currency challenges, remittances to the nominee local bank were being made in bond notes, which it had to convert into hard currency.

The State alleges that from May 3 to 23 this year, Murove, Taranhike and Matengabadza, acting in connivance and without authority from Zinara, allegedly sourced foreign currency from the parallel market through Access Finance (Pvt) Ltd and Grayriver (Pvt) Ltd directors, after paying them a total of $2,94 million on the pretext that the payment was for reimbursement to DBSA on behalf of Zinara.

A whistleblower tipped off bank security that Grayriver, which had received $300 000, was a fraudulent company, used to siphon money from Zinara. The information was passed on to the Reserve Bank of Zimbabwe, which made a report to the police.

Ramwi, however, believes the case was weak.

"From the presentations made to the board it was noted that the matter affects international relations with players from South Africa as well as Zinara's local stakeholders. The facts on the ground fail to establish a case of theft of Zinara and Infralink funds or that the employees in question actually benefitted in the process.

"I must say that the board noted that the case was very weak, Honourable Minister, thus it stands a better chance of withdrawal to save ourselves from the impending embarrassment," he said.

Ramwi added that the board resolved to withdraw the case and "recall all four employees back to work as we continue monitoring and dealing with the case internally".

The withdrawal of charges against the Zinara executives follows a highly publicised incident in July 2016, when Vice President Phelekezela Mphoko, who was acting president at the time, sprang the parastatal's then acting chief executive officer Moses Juma and former board member Davison Norupiri from Avondale police station.

The two officials had been arrested on allegations of defrauding Zinara of $1,3 million.
- fingaz