How Ghanaian tycoon’s US$10m was looted

THE US$6 million bribery scandal centred on former Zimbabwe Mining Development Corporation (ZMDC) chairperson Godwills Masimirembwa could claim the scalps of Zanu PF bigwigs linked to associated dodgy deals as it emerged this week more than US$10 million of shareholders’ funds in Gye Nyame Resources was abused by the diamond venture’s indigenous partners.

Chris Muronzi

Informed sources said capital outlays for the diamond project were siphoned through hefty salaries unrelated to market trends, a bloated staff complement and deliberate inflation of prices of mining equipment and other supplies.

Gye Nyame Resources is now owned by ZMDC which has a 50% stake, Zimbabwe Republic Police Trust (20%), Essien (24%), and Dantor (6%), a company representing the interests of local shareholders Itai Munyeza and Blessmore Chanakira.

Well-placed sources this week said Ghanaian tycoon William Ato Essien had committed and lost more than US$10 million in Gye Nyame operations to his indigenous partners — Munyeza and Chanakira — in an elaborate financial scam in which the duo allegedly awarded themselves hefty salaries and introduced directors’ fees as high as US$6 000-US$8 000 a month. Itai is the young brother to African Sun CEO Shingi Munyeza, while Blessmore is related to Kingdom Bank founder Nigel Chanakira.

Blue chip companies such as Meikles pay their directors US$35 000 a year, which translates to just less than US$3 000 a month.

Other non-managerial employees at Gye Nyame were taking home more than US$5 000 per month, the sources said.

“These guys deliberately looted the company through financial mismanagement in the form of hefty salaries paid out to themselves and workers. For instance, the lowest paid worker was getting US$1 500 a month. In the period when Essien was barred from coming into the country, the local partners plundered over US$10 million of his money,” a source said.

Investigations show the Ghanaians discovered mining equipment invoiced at US$3 million had been acquired for as little as US$100 000, meaning the difference had been converted to personal use.

The equipment, a 50-tonne dense media separation (DMS) machine was acquired from a reputed South African company.

According to the sources, Essien had in total brought in over US$20 million into the country in investment. He is said to have invested US$4 million in First Capital Zimbabwe, a micro finance institution, US$10 million in working capital for Gye Nyame, and the US$6 million which was allegedly taken by Masimirembwa, according to President Robert Mugabe.

However, Munyeza denies the charges against him, saying the Ghanaians never invested such large sums of money. He also disputes that the machinery the company acquired could be sourced any cheaper.

“Let them show you evidence that they invested US$10 million,” he said. “There is no DMS for a million rand, even if it is second hand. You cannot inflate the price of a DMS because the banks deal directly with the supplier.”

The Zimbabwe Independent this week saw records of a seires of deposits by Essein.

Besides, Essien, Munyeza and Chanakira, other directors of Gye Nyame are Charles Mufandaidza, Justice Chengeta, Mekia Tanyanyiwa, Grace Nomsa Ndebele — a senior assistant police commissioner, Thompson Mensah Isaac Osah, Archibald Tadiwa Muradzika, Tafadzwa Musarara and Manson Mnaba, according to the company’s CR14 records. Former ZMDC CEO and general manager Samson Siziba resigned.

A source said when Essien eventually regained control of the company after bruising boardroom battles, Munyeza and Chanakira had tried to muscle out the Ghanaians by providing working capital through their company Dantor which held a 6% stake, in a move insiders said was meant to consolidate their position. A source said there was a lot of infighting at Gye Nyame after Munyeza tried to seize it.

“He wanted to push everyone out, but the police and (company chairperson Manson) Mnaba proved to be a problem for them,” said a source. “Police hold a 20% equity in Gye Nyame and were the ones who stopped him.”

The Independent’s investigations show all had been unwell in Gye Nyame long before Mugabe railed against Masimirembwa at a luncheon hosted for MPs last week, accusing him of soliciting and receiving a US$6 million bribe, a charge he denies.

Sources said police received a court order in July to collect financial information from banks such as Ecobank that had dealings with the company, an indication of lingering suspicions of shady dealings before Mugabe’s public outburst.

Mugabe was alerted to the scandal by former South African president Thabo Mbeki who was approached by Essien’s associate as the battle for the control of Gye Nyame and the siphoning of funds reached fever-pitch, investigations show.

11 thoughts on “How Ghanaian tycoon’s US$10m was looted”

  1. Chipoto says:

    I did not know that “The Police” are now a separate entity of government and that they can invest money without the knowledge of ministers. No, they should just say “Chihuri” and not misuse the name “Police”

  2. chamachamapinduzi says:

    Zvakaoma sekunamata!!

  3. mizha says:

    Muronzi how did you come up with $10 million figure
    Chris how do you compare apples and oranges. Your comparison between Miekles and Gye is shallow. Do editors at the Zimbabwe Independent where you work get the same salaries as Editors at the Herald? If not your argument is shallow. What is wrong with non directors getting $5000 a month take home? If they signed a contract that they will be paid $5000 take home so what is the problem? What market trends are you talking about? Private companies pay their employees what the employees are worth not what other companies are paying. Munyeza challenged you to produce the evidence that indeed $10m was siphoned from the company. Why didnt you? this story is full of generalizations

    1. magame says:

      Mizha unenge wakapiwa imwe yacho iwe. Companies including ,blue chips like delta,pay market related salaries not this nonsense of what employees are worth. Delta aims to be in the top quartile of the market in terms of salaries that is why they always ride economic storms.

      1. John Mhizha says:

        Magame and Muronzi you both are out of touch with reality. If we are to talk about market related salaries, a salary of $5,000.00 is way below market average for artisans and technicians in the sector in which this company was operating when considering global trends. If the mine was to be successful they needed to attract competent people. So I wonder which market you are talking about given that diamond is sold at the international market and not at mbare musika. The issue here is that this capital at hand was inadequate for this kind of undertaking and this was a result of greed on the part of all the owners. Vaida kudya vega. If only they had floated shares on the stock market, Zimbabweans would have been happy to participate in ownership of the mines. Right now there are only about four companies on ZSE worth investing in and the rest are churning out poor results year -in- year-out. As local investors we would been more than happy to have another profitable company to invest in. The government and ZMDC should have ensured that there is adequate capital before granting licence to these people. This, I believe, is where the investigations should focus their effort and correct the system from the root.

        1. wamaromo says:

          John Mhizha which global trends are you talking about. These salaries are obscene and you know that you just want to be impossible by trying to talk global when you are just a village boy. I have been around in quite some developed countries such salaries in our economy are obscene and are meant to loot a company full stop. They did it in America giving themselves hefty salries and allowances and they were sanctioned for it of you read well. So which global economy have you checked with. Even China does not do that yet its considered very rich.

  4. 49/51 says:

    Ladies and gentlemen, to be fairly honest, in the context of our diamond mining potential and our national interest, mari dzirikunetsa munyaya iyi and the levels of investment and bribery are a serious indictment on our dignity and pride. This is chip change guys. Such an issue should be resolved in the Marange magistrates court and not even make it to the front page of the Manica Post, let alone the national papers. These Ghanaians have mafia like investment tendencies, they came in a veil of dishonesty, and the results are there for all to see. The only thing about this story is it offers a small insight into the shady goings on of the Marange mining, and also how the Presidents finger is not on the button on this. And other issues

  5. Pelo says:

    what is this zrp trust, its pay time

  6. kechemu says:

    a masimiredog of a comment of goon nharo@ mizha

  7. matimba says:

    The ZRP is surely party to this deal.They an interested party and would do their professionally image good by recusing themselves from investigating this case. Commissioner-General Chihuri kindly do the most professional thing recuse yourself and ZRP before the President.

  8. In other words, it was a typical Zimbabwean “enterprise”. No wonder foreign investors avoid Zim like the plague.

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