Source: ED sucked into US$9m GMB saga – NewsDay Zimbabwe 26 FEB, 2020
By Veneranda Langa
PRESIDENT Emmerson Mnangagwa and former Finance minister Patrick Chinamasa have been sucked into a US$9 million saga for the rehabilitation of Grain Marketing Board (GMB) silos fronted by millers, which has become the latest subject of investigations by Parliament.
Grain Millers Association of Zimbabwe (GMAZ) boss Tafadzwa Musarara yesterday told Parliament that his organisation released US$9 million in 2016 following an approach by Mnangagwa, who was seeking funding for the refurbishment of GMB’s dilapidated silos ahead of an expected bumper harvest under government’s Command Agriculture programme.
Musarara appeared before the Justice Mayor Wadyajena-led Parliamentary Portfolio Committee on Agriculture to respond to two issues pertaining to whether GMAZ gave an US$8 million loan to GMB and whether it received US$27 million from the Reserve Bank of Zimbabwe to import wheat on behalf of millers.
He claimed that GMAZ gave GMB the loan and that Mnangagwa admitted that at one of his Zanu PF rallies.
GMB, however, denied ever receiving a loan from GMAZ, but admitted having refurbished the silos.
“Sometime in late 2016, the then chairman of the Cabinet committee on food security, now President Emmerson Mnangagwa, approached the milling industry, saying Command Agriculture was successful and there was a big harvest, but silos needed to be funded, but Treasury did not have the money,” Musarara said.
“At that time, we were approached by the then Minister of Finance, Patrick Chinamasa, who said government was desirous to seek a loan from the millers to fund repairs of silos and we took the offer as millers. We provided a funding arrangement through a term sheet and signed an agreement with the Minister of Finance, which we have submitted to this committee.”
Musarara said the US$9 million was deposited into a MetBank escrow account number 0107003279714 as a loan to GMB and, in turn, government was going to sell GMAZ members maize at $240 per tonne and not $270.
He said auditors Baker Tilly Gwatidzo Chartered Accountants confirmed that it was done, adding he had all the documents to prove it.
But the committee said it only had evidence that out of 105 GMAZ members, only two millers — National Foods and Parogate — participated and got maize at $240, while smaller millers bought the maize at $270 per tonne.
GMB managing director Clemence Guta said the silos were repaired using money from maize sales to GMAZ members and not through the US$9 million loan that Musarara claimed he gave them.
Musarara produced an audit report from Baker Tilly Gwatidzo and a term sheet from GMB to the GMAZ financial advisers MetBank, who facilitated the disputed loan facility.
Both documents were dismissed by Wadyajena, who claimed that there was no mention of the term “loan” but financing.
Wadyajena insisted that the term sheet confirming the disbursement of the US$9 million should bear the term loan, not financing.
Guta maintained that he was not aware of the loan facility despite Musarara producing an audit report and a term sheet confirming his claims.
“We never received any money from GMAZ and we repaired our silos using money from sales of maize to millers,” Guta said.
“GMB never entered into any loan agreement with GMAZ for any silo repairs. According to the Public Finance Management Act, we are supposed to get authority to borrow, which we never solicited for.
“GMB never signed any term sheet to lend (sic) money from GMAZ. What Musarara is referring to as a term sheet is a purchase agreement for GMAZ membership to buy maize from GMB. Purchases ranged from $240 000 to $1,4 million and these cannot be loans in this inflationary environment.”
He said individual members of GMAZ, National Foods and Parogate were purchasing grain at $240 while others got it at $270 per tonne.
Finance minister Mthuli Ncube and Agriculture secretary Ringson Chitsiko also told the committee that GMAZ did not give a loan to GMB to repair the silos.
Wadyajena then asked Musarara about a video circulating, where Mnangagwa told a Zanu PF rally that Musarara would give him money for the silos.
“In that video, the President actually said Musarara has given us the money,” Musarara responded.
On the US$27 million said to have been given to GMAZ for wheat imports, Musarara said it was actually US$26 138 000 which went to an international company called Holbart, which bought the wheat in question through one of his companies, Drosky (Private) Limited.
He brought his accountant Chido Mumbengegwi, who explained the transaction, saying that she had the Holbart contract to import the wheat through the GMAZ Ecobank account facilitated by the RBZ.
GMAZ general manager Lynette Veremu said the agreement was with 14 of their members that were wheat millers.
But Wadyajena said: “We wrote to Zimra and they said there was no acquittal because all imports went through the borders, and we also asked all border posts and they said there was no wheat imported by GMAZ. So tell us how you used the US$27 million.
“Millers deposited the money into GMAZ account and not Drosky to purchase wheat. We are going to call you again as Drosky and not GMAZ to explain how you spent the US$27 million.”