POLICE are intensifying investigations into Chinese diamond firm Jinan Mining’s activities for allegedly externalising hundreds of millions of United States dollars to Botswana and other countries. This is the single largest probe of a diamond company since the official discovery of the Marange gem fields in 2009.
The move comes as it emerged that Jinan did not externalise US$340 million as widely reported in the media but in fact siphoned out US$585 million. Last month former BancABC managing director Hashmon Matemera appeared at the Harare Magistrates’ Court charged with externalising the funds on behalf of Jinan during his period at the bank.
Allegations against Matemera are that he facilitated the externalisation of US$332 980 000 for Jinan to Botswana, Zambia, Sierra Leone, Mozambique, Dubai and China when he was still at the helm of BancABC in 2013.
However, investigations by the Zimbabwe Independent show the figure concerned is much higher — over US$500 million.
Zimbabwe Republic Police spokesperson Senior Assistant Commissioner Charity Charamba this week confirmed to the Independent that investigations into the case were intensifying.
It is also understood that police have in the past week interviewed Jinan and BanABC employees in a bid to squeeze out new information and evidence to buttress their case.
“I cannot disclose the finer details of the investigations, but I can confirm that the investigations are in full swing,” Charamba said.
Sources privy to the developments said between January 2012 and July 2015, Anhui Foreign Economic Construction Company (AFECC), through a series of transactions, transferred funds amounting to US$585 163 824,26 into Jinan’s transitory account in Zimbabwe from China. The transitory account, sources say, was then closed on August 5 2014.
“On December 20 2011, Jinan Mining opened a transitory account with BancABC Zimbabwe for purposes of holding funds from and on behalf of AFECC. The funds were to be used to fund AFECC’s operations in the Southern African Region, including Zimbabwe,” one source said.
“AFECC, through a series of transactions, dating from 9 January 2012 to 25 July 2014, transferred funds amounting to US$585 163 824,26 into the Jinan Mining’s transitory account, from China. The transitory account was closed on August 5 2014.
“During the period which the transitory account was operational, that is, 9 January 2012 to 25 July 2014, Jinan Mining was still going through the process of setting up the business and was not yet exporting minerals.
“An export designated account was opened on December 20 2013 and the exports proceeds were channeled through the export designated account.”
BanABC managing director Joe Sibanda declined to comment on the developments of the case.
“I’m not going to comment, it’s a story that has been running for six months. What is there to comment?” Sibanda said.
Efforts to get a comment from Jinan deputy managing director Tapiwa Goronga were in vain as his phone went unanswered.
On November 25 2014, police served the bank with a warrant of seizure requesting for the account’s details.
Another source said in February this year BancABC received a warrant of search and seizure for specified documents which Jinan used in their various transactions with BancABC.
“The bank supplied the police with all the requested documents and the police have not reverted to the Bank with any questions, subpoena or charge to date. The police did not disclose the identity of the person who had raised a complaint against the bank,” the source said.
“Sometime, during the third quarter of 2015, representatives of government in the joint venture company (ZMDC) came to the bank to inspect the transactions in the transitory account. They did not raise any issues with the account.”
It is also understood that accompanying the warrant of search and seizure was an affidavit which alleges, among other things, that the Chinese firm suppressed the system by allocating themselves more signing powers on the strength of capital injection.
“The police are investigating whether or not Chinese representatives managed to manipulate the system and created fictitious documents which have enabled them to expatriate huge sums of money outside Zimbabwe,” the source said.
BancABC, it has since emerged, sought and obtained expert legal opinion on the exchange control matter involving Jinan’s transitory account as contained in Section 22.214.171.124 of RBZ Directive 1-2009.
“External Counsel Opinion is to the effect that there is no possibility of the bank being convicted of an offence by reason of the remittance of the Jinan funds. This is based on the fact that the law in regard to the effectiveness of the Zimbabwean Exchange Control Regulations is not clear,” a source said.
“This is because Exchange Control Regulations are built around the preservation of foreign currency in Zimbabwe when the country had a currency, the Zimbabwe dollar.”
In February 2009, the Minister of Finance announced that the restrictions against the use of the foreign currency accounts would be treated as free funds and therefore would be freely remittable outside Zimbabwe.
Sources say more documents were collected by the investigating officers on April 5 as they intensified the probe into the case.
President Robert Mugabe has claimed that US$15 billion in diamond revenues were siphoned through corruption, although experts doubt the figure. The Marange diamond mining activities were characterised by reports of corruption, bribery and looting.
Government has stopped mining activities there and forced all the companies to merge to form the Zimbabwe Consolidated Diamond Company which is struggling to operate amid corruption, incompetence and chaos besetting the new firm.