Marange forensic audit stalled

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President Robert Mugabe revealed in March that diamonds worth billions of US dollars had been looted from the country.

A FORENSIC audit into the affairs of the seven mining companies that were operating in Zimbabwe’s diamond-rich Marange area prior to a controversial consolidation exercise has been stalled amid claims government actors lack the political will to expose corruption.

By Taurai Mangudhla

Government at the end of June 2016 formally closed the tender for independent chartered accounting firms to audit seven diamond mining companies suspected of prejudicing the country of billions of United States dollars in Chiadzwa in taxes and royalties through opaque operations and appointed three audit firms –BDO Zimbabwe Chartered Accountants (BDO), HLB Zimbabwe Chartered Accountants (HLB) and PricewaterhouseCoopers (PwC)- by end of August, but the audit is yet to take off for unknown reasons, sources close to the country’s diamond mining operations said.

“Auditors have been appointed and these are BDO, HLB and PwC, but the audit is yet to start. People know what a real audit will expose and those close to the corridors of power will be exposed,” said a source, who requested anonymity, adding the mines ministry and the auditor and comptroller-general’s office were secretive about the process.

“The people who are supposed to carry out the audit are there, they were appointed long back but we don’t know why it’s yet to take off…there is no explanation except that there are some administrative issues,” added the source.

Comptroller and auditor-general Mildred Chiri in June told the Zimbabwe independent terms of reference would require the auditors to look into how the companies operated from an administrative and financial point of view, how cash was being managed and also all receipts of payments and other financial matters.

It is understood government appointed three firms to spread the huge workload because of the number of companies that have to be individually audited with a view to establishing the volume of diamonds produced in Chiadzwa and how the revenue proceeds were used. The seven companies which operated in Chiadzwa under 50-50 joint ventures with the Zimbabwean government are Mbada Diamonds, Anjin, Marange Resources, Diamond Mining Company, Kusena Diamonds, Jinan and GyeNyame.

The companies paid negligible dividends to treasury despite huge expectations from government, forcing former finance minister Tendai Biti and his successor Patrick Chinamasa to successively revise downwards national budgets.

Official figures from the Kimberly Process Certification Scheme show that Zimbabwe earned US$2,5 billion in Chiadzwa, but President Robert Mugabe claimed in March that as much as US$15 billion had been made from diamond sales.

The government in February ordered diamond mining firms to cease operations to pave way for the establishment of the Zimbabwe Consolidated Diamond Corporation, citing lack of transparency and accountability among other things.

This is not the first time government has instituted investigations into the diamond companies.

Chidhakwa in 2014 moved to suspend Jerry Ndhlovu, the former head of Zimbabwe Mining Development Corporation (ZMDC) in a blitz meant to pave way for an audit into the operations of the diamond mining companies.

The purge by Chidhakwa also saw Marange Resources bosses being sent on forced leave.

But investigations into alleged graft at Marange Resources, a government-owned diamond mining company, did not yield anything as the report was never made public.

Investigations by the Independent established that most of the investigating committee members were from the ministry of mines, a development that raised questions about the independence of the investigators in discharging their duties.

Efforts to get a comment from Mines minister Walter Chidhakwa were fruitless at the time of going to print.

“I am in a meeting,” Chidhakwa said, before he hung up after listening to questions from businessdigest.

Mines secretary Francis Gudyanga could also not respond to questions at the time of going to print as he was said to be in a series of meetings.

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