Chidhakwa arrested

Faces charges of criminal abuse of office

MMCZ operating on negative cashflows

Business Writers
Former Mines and Mining Development Minister Walter Chidhakwa, was yesterday arrested on allegations of corruption and abuse of office as the new Government intensifies its clampdown on alleged high profile graft cases by current and former senior officials.

It also emerged yesterday more senior officials are facing arrest in connection with many shenanigans they allegedly committed while holding higher offices in the Government.

Already former Finance and Economic Development Minister Ignatius Chombo, has been arraigned before the courts facing an array of charges bordering on criminal abuse of office.

This followed an operation staged by the military largely targeting corrupt people surrounding former President Mugabe blamed for running down the economy. Mugabe has since stepped down.

Chidhakwa was picked up yesterday morning by the Zimbabwe Anti-Corruption Commission officials and spent the better part of the day at the anti-graft body’s Strathaven office before taken to Rhodesville Police Station where he is detained. He is expected to appear in court today or tomorrow, sources familiar with the development told Business Weekly.

According to documents seen by this paper, Chidhakwa and the then Permanent Secretary Francis Gudyanga, made “unjustified” and nepotistic board appointments of companies under the Ministry. Gudyanga has since been arrested and is facing criminal abuse of office.

The allegations are that Chidhakwa and Gudyanga appointed a board for the Zimbabwe Mining Development Company (ZMDC) subsidiary called Mining Promotions Corporation (MPC). The board is alleged to have had six members and four employees between 2014 and 2016. The company was bankrupt and had its salaries, board fees and operational costs covered by the Minerals Marketing Corporation of Zimbabwe (MMCZ), which had no relation with MPC.

It is understood that MPC benefited $400 000 per month from MMCZ for unclear expenses.

“The intension was to reward friends. The Minister appoints a board to a company that is not even capitalized. ZMDC, the parent company was technically insolvent and company could not even pay off its operational obligations. How then could be the decision be practical and economical to resuscitate such a company without capitalization from the parent company ZMDC.”

It is alleged that Chidhakwa authorized that MMCZ finances the operationalisation of the ZMDC subsidiary without Cabinet and Treasury approval.

It is further alleged that MMCZ was forced to abandon critical projects as funds we diverted to pay board fees whose work had not been sanctioned by Cabinet.

In mid 2016, the former Minister and his secretary appointed the same MPC board as the MMCZ. The board was drawing board fees from the MMCZ and MPC where there was no meaningful economic work being done.

One Dr Made become the board chairman of MPC and MMCZ, using funds from the minerals body to pay board fees, salaries and operational costs. There was a sudden increase in special board frequency between 2016 and 2017, prejudicing the MMCZ of unwarranted board fees.

The matter has sucked in one of the MMCZ directors, Brains Muchemwa of Oxlink Micro Finance after the new MMCZ board stopped a medium term loan scheme for staff, directing that the employees obtain such loans from Muchemwa’s company.

MMCZ would guarantee to such loans in the event of default by staff.

“This is conflict of interest and abuse of office with fraudulent intent,” reads the documents in part.

Between 2014 and 2016, Dr Made communicated directly with MMCZ management requesting for funds which was in sharp contrast with good corporate governance. Chidhakwa, is alleged to have failed to seek treasury approval for such funds which were neither intercompany loans observe laws.

It is also alleged Dr Made connived with one Nomsa Moyo for her to be appointed three conflicted positions (Acting general Manager, Deputy General Manager – Corporate Affairs and being also the company secretary).

“It is clear that a general manager being company secretary to the same board is clear indication of the intension to hide information,” reads the documents in part.

She obtained a housing loan of $120 000 when she qualified for only $42 000.

Further, cash held by MMCZ had reached critically low levels not only as a result of mining sector revenues but through increased outflows in the form of dividends and/or donations. Cash held was at $4.43 million at December 31, 2012 but this position deteriorated significantly to very low levels of $389 000 from 2015 to date. When this amount is matched against pending cash payments (dividends) of $841 000, the company is left with a negative cash balance. The bulk of the dividends were paid to Pedstock (over $2 million)

According ZACC sources senior Government officials could soon be arrested facing various charges ranging from corruption to financial impropriety.

Gudyanga has since appeared in court and is out on bail.