Bank with links to Mujuru got diamond profits

Bank with links to Mujuru got diamond profits

By Lance Guma
05 October 2010

Interfin Financial Holdings, a bank with reported links to retired army general Solomon Mujuru, received an investment of over US$2 million in diamond and gold proceeds from the state-owned Zimbabwe Mining Development Corporation (ZMDC).

This follows revelations that several top managers at the ZMDC, who have since been suspended by the board chairman, invested millions of dollars in the money market even as the corporation’s own mines were forced to close down due to lack of capital.

Exiled businessman Gilbert Muponda is locked in a bitter dispute with Interfin after accusing them of ‘looting’ his Century Bank (CFX Bank) and says his team have been investigating the story in preparation for a law suit against Interfin. He says managers at Interfin bribed ZMDC managers to invest the money and it was only their lavish lifestyle and expenditure patterns that got them caught.

Suspended ZMDC chief, Dominic Mubayiwa sent smoke signals when he started building a 3 storey mansion in Borrowdale, something clearly beyond his means. Over US$40 million in diamond and gold proceeds is said to have been siphoned off or used in shady deals. The figure is said to include US$30 million raised from diamond sales between October 2008 and April 2010.

Mubayiwa and his team poured money into Interfin, Premier Bank, Kingdom Bank, BancABC, Fidelity Asset Management and Premier Asset Management. This is despite the ZMDC Act making it clear its primary function is to invest in the mining industry, on behalf of the state.

Worse still, Mubayiwa and his management failed to pay government any meaningful dividend. A confidential ZMDC report leaked to the media says; ‘The first ever dividend of US$1 million was in March 2010 and US$3 million dividend paid on July 26, 2010 was only made after the board insisted to management that one of ZMDC's responsibilities was to generate revenue for the fiscus.’
SW Radio Africa understands that a prominent army general deposited close to US$5 million in a local bank soon after the first international diamond auction held in Harare in August. It was estimated that US$72 million was raised from the auction but how much went to government remains a mystery.

Banking sources confirmed that the deposit made by the general set tongues wagging in the industry. More importantly it confirmed how senior military figures are controlling the diamond trade in Zimbabwe.

Meanwhile Muponda warned money transfer giant Moneygram International over its continued dealings with Interfin. He said there was corruption at Interfin and ‘in the United States (where Moneygram is headquartered) you have what is called the Foreign Corruption Act which they are liable to if they are seen to be involved in corrupt activities. They will be linked to these things if they are not careful,’ he warned.