Missing diamond funds turn up at Interfin Bank Zimbabwe

The missing diamond sales proceeds which have been subject to much debate have been linked to selected financial institutions including Interfin Bank Zimbabwe allegedly owned by retired General Mujuru through his business associate Farai Rwodzi.Media reports have been awash with missing US$ 30 million from diamond sales which the Minister of Finance Tendai Biti said never reached the Treasury.

These funds have reportedly been traced to a select group of Financials institutions earning minimum interest whilst the ZMDC mines are collapsing due to lack of cash.

The financial scandal rocking state-owned Zimbabwe Mining Development Corporation (ZMDC) has deepened amid further revelations that the company’s suspended top managers, including CEO and general manager Dominic Mubayiwa, invested millions of dollars in the money market while the corporation’s mines were being closed according to reports carried by The Zimbabwe Independent.

“Proceeds from diamond sales were invested with financial institutions instead of being utilised to capacitate the gold mines,” the report says. “The primary function of the Zimbabwe Mining Development Corporation is to invest in the mining industry in Zimbabwe on behalf of the State and not to invest on the money market. Part III, Section 20 of the ZMDC Act clearly articulates the primary function of the corporation,” the official said.
A confidential ZMDC report in possession of the Zimbabwe Independent show that Mubayiwa and his suspended colleagues are being investigated for investing at least US$9 million in the money market while they let ZMDC-owned mines shut down due to lack of capital.

It is believed the top managers were paid kick backs by Interfin Bank and other banks to deposit the funds at these banks whilst the mines were being starved of cash.A well informed source confirmed the ZMDC mangers would get various under the table payments in exchange of investing with the selected banks which were involved in the corrupt syndicate.

As reported in the Independent last week, ZMDC is also is investigating the suspended Mubayiwa and three other company executives over the alleged siphoning and shady usage of US$40 million in gold and diamond proceeds.

“Each time they were asked about the US$12 million taken from gold proceeds to open a diamond mine, the US$30 million raised from diamond sales between October 2008 and April 2010 and the US$9 million invested in the money market while mines closed down, they just raised dust and failed to provide clear answers,” a senior ZMDC official told the Independent. “They didn’t provide clear explanations, they just raised bull dust.”
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According to the ZMDC report, the investments in the money market included:
- US$1 064 577.36 at Premier Asset Management put at 15/04/10, maturity date 30/07/10
- US$1 064 577.36 at Premier Bank 16/04/10, maturity date 29/07/10
- US$2 055 000 at Interfin Bank Zimbabwe on 27/04/10, maturity date 28/12/10
According to the report The biggest recipient of the looted diamond funds is Interfin Bank Zimbabwe chaired by Farai Rwodzi. Farai Rwodzi is reportedly a business associate of retired General Solomon Mujuru.The suspended ZMDC management is also accused of being loyal to the powerful retired General who is reportedly one of Zimbabwe’s wealthiest individual.

However, sources said while it was not clear why the ZMDC management chose to invest in the money market while mines were closing down, usually heads of state enterprises do that to get the returns from such investments. Mines were also allowed to shut down so that they could later be sold for a song, the sources said. Interfin Bank Zimbabwe are now the preferred custodian of looted state resources whilst some of the proceeds are used to acquire mines which would have been deliberately neglected by the ZMDC and sold to consortiums linked to General Mujuru.

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