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Christopher Kuruneri, promoted to finance minister during Mugabe's Cabinet reshuffle last month, has been paying for the multimillion-rand project in cash despite strict rules in Zimbabwe that limit the export of foreign exchange.
Several sources close to the project say its cost is about R30-million.
Kuruneri has strenuously denied breaking Zimbabwe's foreign exchange rules. He said this week that the house was his and that he was not acting on behalf of anyone else.
At the time of the reshuffle on February 9, Mugabe announced that Kuruneri ( until then deputy finance minister) would "spearhead" the country's economic recovery.
Since Kuruneri's promotion, several Zimbabwean businessmen have been arrested on charges of "externalising" foreign currency. Two of them, James Makamba and Cecil Muderede, are still awaiting trial.
This week, several financial insti tutions were shut down on suspicion of illegally exporting currency from Zimbabwe, among other charges.
Kuruneri has been paying monthly visits to Venture Projects & Associates, the company that is building the Llandudno mansion.
Venture Projects is the trading name of C J H Joint Venture, a close corporation established in 1991 by Chris Hayman and Brian John Gelling.
Hayman said this week that the company's main business was project-managing the construction of residential properties. He confirmed that Kuruneri was a client but refused to discuss their business relationship.
Information registered with public bodies confirms that Kuruneri has bought two properties in Llandudno and is funding the construction of a mansion on one of them.
Information at the Deeds Office in Cape Town states that the owner of 17 Apostle Road and 38 Sunset Avenue is Choice Decisions 113 (Pty) Ltd, a so-called "off-the-shelf company".
According to information lodged with the Department of Trade and Industry, Christopher Tichaona Kuru neri is the sole director of Choice Decisions, which bought 17 Apostle Road on March 9 2001 for R2 069 852 from Gianfranco Lovisolo. This property is rented out at present.
Just over a year later, on April 22 2002, Choice Decisions bought 38 Sunset Avenue for R2.7-million from Albert Robert Louis Bertrand.
Work on the house, designed by Cape Town architect Stephen J Forster, began in the middle of last year.
Forster said his brief was to build a three-storey, eight-bedroom house with a floor space of 1 000m².
The house will have eight bathrooms and a dining room that can host 20 people. It will have a triple garage and provision for two lift shafts. Forster said he expected the house to be completed in November.
A source close to Hayman's company said this week that Hayman's services to Kuruneri included the safekeeping of large amounts of US dollars. "There are people in the company who don't like what's going on," the source said.
"Mr Kuruneri comes in with little warning, gives Chris [Hayman] cash to pay the contractors, inspects his properties and then flies back to Harare.
"If he can get on a flight back the same day, he does. No one is allowed to contact Mr Kuruneri in Zimbabwe. Only Chris speaks to him when he arrives in South Africa. On one occasion Chris walked into the office with a huge wad of US dollars in his hand."
This week Kuruneri claimed that the R30-million price tag on the house was "super-nonsense". When it was put to him that he was overseeing the property for Mugabe, he described the claim as " completely false".
Kuruneri said he had raised the money for the mansion while living in Canada and also through his work as a consultant for several multinational companies.
He said he had never contravened Zimbabwe's strict exchange rules as he had never brought the money earned overseas back into Zimbabwe.
Meanwhile, back in Llandudno this week, the foreman on the building site said he had been told that the house was intended for "the head of the African section of the World Bank".