FRESH details have emerged that the National Oil and Infrastructure Company (Noic) withdrew funds in its account held by the Reserve Bank of Zimbabwe (RBZ) to service its US$17,2 million debt owed to Sakunda Holdings.

Noic borrowed the money from the fuel procurement firm to assume full ownership of the Feruka fuel pipeline in a deal that has raised concerns that the state enterprise could have been prejudiced of millions of United States dollars.

Under a controversial loan deal negotiated in 2018, Sakunda Holdings, owned by business mogul Kuda Tagwirei, agreed to advance US$22,75 million to Noic to enable the parastatal to buy out Lonmin’s 50% stake in the ownership of the multi-billion dollar pipeline.

However, according to documents gleaned by this newspaper, Sakunda Holdings later terminated the loan agreement after it had paid Lonmin US$17 261 577 on behalf of Noic. Sakunda Holdings, which has since been demanding payment from Noic, wired the funds into an offshore account held by Lonmin when the loan deal was consummated.

A source close to the transaction told the Zimbabwe Independent this week that RBZ had, on behalf of Noic, released a substantial amount of the money owed to Sakunda Holdings, which became due on April 30, 2020, with an interest of US$1 384 864.

According to communication from the Noic corporate services director, Vivian Mandizvidza to board members, the state procurement company’s cumulative debt to Sakunda Holdings had ballooned to US$25 246 592 as at April 30.

“From the onset, the board’s prudence or lack thereof to receive the US$22,75 million loan from Sakunda Holdings came under scrutiny as itraised a lot of unanswered questions.

Efforts to settle this loan to Sakunda have been a source of discomfort to Noic considering that it has attracted significant interest,” the source said last week.

In a statement issued on Friday, RBZ governor John Mangudya confirmed that Noic had withdrawn the money from the Central Bank to its commercial Bank.

However, he did not state the commercial Bank into which Noic wired the funds it withdrew from its RBZ account.

“..the National Oil Company of Zimbabwe (Private) Limited (Noic) has an account held and maintained with the Bank in its capacity as banker to the State.

Noic made a withdrawal of funds from its account and transferred the funds to its commercial bank account and not to Sakunda Holdings,” Mangudya said.

The outstanding balance to be paid by Noic, as documents show, will attract 5% interest per annum if it is not paid by December 31, 2020.

Under the terms of the loan deal, before Sakunda Holdings released any funds to Lonmin, Noic paid a cash cover of ZW$30 million to the petroleum procurement entity, an amount which the state enterprise will be reimbursed once it settles its debt obligations to Tagwirei’s firm.

When Noic paid the cash cover amount, the Zimbabwean dollar was trading at 1:1 with the US dollar according to the prevailing official exchange rate at that time, while the parallel market exchange rate was around US$1:ZW$3.

Following the introduction of the weekly foreign currency auction rate which currently stands at US$1:ZW$81, ZW$30 million is now equivalent to US$370 000.

Noic board chairperson Daniel Ncube could not disclose the exact amount withdrawn from the central bank to pay Sakunda Holdings when quizzed by the Independent.

He said: “I will have to check. I do not have the information with me.” Settlement of the debt to Sakunda Holdings, which has been a source of headache to Noic, was a subject of intense discussion on March 26 by the entity’s board which sought authorisation to settle its obligations.

According to documents seen by this newspaper, Mandizvidza wrote to the entity’s board members, seeking approval to settle the parastatal’s debt to Sakunda Holdings. “Subsequent engagements with Sakunda resulted in Sakunda invoking the provision of the loan agreement relating to termination.

Sakunda raised incapacity to proceed with the agreement due to the changes in the law prohibiting the payment to a local company offshore. Sakunda further gave notice to terminate the agreement and requested Noic to pay back the loan amount and interest due,” Mandizvidza’s letter to board members reads.

“The effect of this communication was to terminate the loan and make repayment due. At the board meeting held on March 26, 2020, the board authorised management to engage Sakunda with a view to reaching an agreement on the settlement of the amount owed by the company in local currency, at the official exchange rate.”

Noic chief executive officer Wilfred Matukeni, who since July could not explain to the Independent why the state-run entity, which now wholly owns the pipeline through PetroLine Zim Limited, received the loan specifically from Sakunda, also did not respond to inquiries on the amount of money Noic has paid back to Tagwirei’s firm so far.

Similarly, Tagwirei had not, at the time of publishing, responded to questions posed last week on the amount of money his firm has so far received from the central bank.

During the subsistence of the loan agreement Sakunda enjoyed preferential treatment through a US$6,6 million “discount on pumpings” for fuel it pumped through the pipeline.

Tagwirei, who is President Emmerson Mnangagwa’s advisor and Zanu PF benefactor, was placed under sanctions by the United States government in August on allegations of public corruption centred on how his Sakunda Holdings firm handled the management of the US$3 billion Command Agriculture funds.

As reported by this newspaper on February 20, Sakunda Holdings’ dominant usage of the pipeline, which runs from Beira (Mozambique) to Harare, has resulted in a 40%
underutilisation of the infrastructure, prejudicing Zimbabwe a staggering US$400 million annually.

Recent Posts

Stories you will enjoy

Recommended reading